Factors Likely To Shape Norfolk Southern's (NSC) Q1 Earnings
Zacks Investment Research | Apr 16, 2019 10:36PM ET
Norfolk Southern Corporation (NYSE:NSC) is scheduled to release first-quarter 2019 results on Apr 24, before market open.
In the last reported, the company delivered impressive results, with earnings and revenues beating the Zacks Consensus Estimate. Results were aided by volume growth among other factors.
In fact, Norfolk Southern has an impressive earnings surprise history. The company’s earnings surpassed the consensus mark in each of the trailing four quarters, the average being 8.1%.
Let’s delve deep to unearth the factors likely to influence this Norfolk, VA-based railroad company’s results in the soon-to-be-reported quarter.
We expect Norfolk Southern’s first-quarter results to be hurt by sluggish freight shipments. The downbeat freight scenario is quite evident from the fact that North American freight shipments have declined in each of the three months of first-quarter 2019, according to the latest Cass Freight Shipments Indexreport .
Additionally, the automotive division is likely to perform disappointingly in the soon-to-be-reported quarter similar to the past few quarters, thereby hurting results. Sluggish vehicle production in the United States is contributing to the below-par performance of the segment lately.
However, Norfolk Southern is likely to see an improvement in its operating ratio (operating expenses as a percentage of revenues) in this reporting cycle mainly owing to efforts toward reducing costs. The company recently implemented the precision scheduled railroading model to improve efficiencies.
Additionally, intermodal revenues are likely to be strong, thereby aiding its top line and mitigating the negative impact of sluggish freight revenues. The consensus mark for intermodal revenues is pegged at $732 million, indicating a rise from $678 million registered in the year-ago quarter.
Norfolk Southern Corporation Price and EPS Surprise
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