Norfolk Southern Corporation NSC is scheduled to report second-quarter 2023 results on Jul 27, before market open.
NSC has an impressive earnings surprise history, having surpassed the Zacks Consensus Estimate in each of the preceding four quarters, the average beat being 4.7%. However, the story may be different in the June-end quarter. The Zacks Consensus Estimate for second-quarter 2023 bottom line has been revised 3.1% downward over the past 60 days.
Let’s have a look at the factors likely to have affected NSC’s performance in the quarter under review.
Norfolk Southern Corporation Price and EPS Surprise
Norfolk Southern Corporation price-eps-surprise | Norfolk Southern Corporation Quote
We expect high operating expenses (our estimate indicates a 0.5% increase from second-quarter 2022 actuals) to have dented NSC’s bottom line in the to-be-reported quarter. High fuel costs are also likely to affect results. Even though fuel price has come down from the highs witnessed earlier, it still remains at an elevated level. The Zacks consensus estimate for quarterly earnings indicates an 8.7% decline year over year.
Due to high costs, the operating ratio (operating expenses as a percentage of total revenues) is likely to have deteriorated year over year. Our second-quarter 2023 estimate for the metric is currently pegged at 64.3% compared with 60.9% reported in second-quarter 2022. A lower value of the metric is preferable.
Supply-chain disruptions and slower network velocity are expected to have weighed on volumes in the quarter to be reported. Our estimate indicates a 7% decline from second-quarter 2022 actuals.
What Our Model Says
Our proven model does not conclusively predict an earnings beat for Norfolk Southern this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is not the case here. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter.
Norfolk Southern has an Earnings ESP of -1.12% and a Zacks Rank #4 (Sell).
Stocks to Consider
Here are a few stocks from the broader Zacks Transportation sector that investors may consider, as our model shows that these have the right combination of elements to beat on earnings this time around.
JetBlue Airways Corporation JBLU currently has an Earnings ESP of +12.5% and a Zacks Rank #2. It will release second-quarter 2023 results on Aug 1. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for JBLU’s second-quarter 2023 earnings has gained 185.1% year over year.
Copa Holdings, S.A. CPA has an Earnings ESP of +0.82% and a Zacks Rank #2. CPA will release results on Aug 9.
Copa Holdings has an expected earnings growth rate of more than 100% for second-quarter 2023. CPA delivered a trailing four-quarter earnings surprise of 14.60%, on average. The Zacks Consensus Estimate for CPA’s second-quarter 2023 earnings has been revised upward by 94% in the past 90 days.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.
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Norfolk Southern Corporation (NSC) : Free Stock Analysis Report
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
