In This Article:
Norfolk Southern Corporation’s (NSC) first-quarter 2025 earnings of $2.69 per share (excluding 62 cents from non-recurring items) missed the Zacks Consensus Estimate of $2.72. The bottom line, however, increased 8% year over year, owing to lower costs.
Railway operating revenues were $2.99 billion in the quarter under review, almost in line with the Zacks Consensus Estimate. The top line decreased 0.4% year over year.
Norfolk Southern Corporation Price, Consensus and EPS Surprise
Norfolk Southern Corporation price-consensus-eps-surprise-chart | Norfolk Southern Corporation Quote
Overall volumes increased 1% year over year. Total revenue per unit dipped 2% year over year. Income from railway operations rose more than 100% year over year to $1.15 billion.
Railway operating expenses declined 34% on a year-over-year basis to $1.85 billion, primarily due to a double-digit decrease in fuel expenses.
NSC’s president and chief executive officer, Mark George, stated, “The Thoroughbred team once again demonstrated tremendous resilience in the quarter, overcoming a disruptive winter storm season to deliver an improved operating ratio, earnings growth, and a consistent service experience for our customers.”
We note that another player from the Zacks Transportation-Railroad industry, Union Pacific Corporation (UNP), will report its first-quarter earnings numbers later this month. (See the Zacks Earnings Calendar to stay ahead of market-making news.)
UNP is scheduled to report first-quarter 2025 results on April 24, before market open. Weakness pertaining to freight revenues and volumes do not bode well for UNP. Economic uncertainty is also a cause for worry.
UNP’s earnings lagged the Zacks Consensus Estimate once in the preceding four quarters and surpassed the mark in the remaining three quarters, delivering an average rise of 3.35%.
Q1 Segmental Performance of NSC
Merchandise revenues were flat year over year at $1.86 billion. Actual segmental revenues were lower than our estimate of $1.91 billion. Revenue per unit increased 2% year over year.
Revenues from Intermodal rose 2% year over year to $760 million. Actual segmental revenues were lower than our projection of $778.2 million. While segmental volumes increased 3%, revenue per unit tumbled 1% year over year.
Coal revenues were $370 million, down 7% year over year. Actual segmental revenues came ahead of our projection of $347.1 million. Coal volumes fell 1% year over year. Revenue per unit declined 5% in the reported quarter.
Liquidity & Buyback
Norfolk Southern exited the first quarter with cash and cash equivalents of $1.01 billion compared with $1.64 billion at the end of the prior quarter. NSC had a long-term debt of $16.6 billion at the first-quarter end, which was almost flat sequentially.