We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties. You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies. In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Norfolk Southern Corporation (NSC - Free Report) reported lackluster fourth-quarter 2023 results, with both the top and bottom lines missing the Zacks Consensus Estimate. A weak freight market hurt results. The below-par results naturally disappointed investors, resulting in the stock losing value in early trading.
Quarterly earnings (excluding 51 cents from non-recurring items) of $2.83 per share fell short of the Zacks Consensus Estimate of $2.90 and declined 17.2% year over year. Results were hurt by high costs. Overall volumes increased 3%. Total revenue per unit declined 8% in the final quarter of 2023.
Railway operating revenues were $3,073 million in the quarter under review, lagging the Zacks Consensus Estimate of $3,109.4 million. The top line decreased 5.1% year over year, with all key segments including Merchandise, Intermodal and Coal registering deterioration in revenues. Total revenue per unit dipped 8% year over year. Income from railway operations decreased 32% to $808 million, including a charge of $150 million associated with the Eastern Ohio incident.
Railway operating expenses shot up 10% on a year-over-year basis to $2,265 million, primarily due to a double-digit increase in expenses on compensation and benefits apart from the expenditure of Ohio derailment. Norfolk Southern’s operating ratio (operating expenses as a percentage of revenues) deteriorated to 68.8% in the fourth quarter from 63.5% in the year-ago quarter due to higher costs and lackluster revenues. A lower value of the metric is preferable. Our estimate for this metric was 67.4%.
Segmental Performance
Merchandise’s revenues declined 1% year over year to $1,849 million. Actual segmental revenues were lower than our estimate of $1,896.1 million. Volumes were flat, whereas revenue per unit declined 1% year over year.
Revenues from Intermodal plunged 13% year over year to $794 million. Actual segmental revenues were higher than our projection of $765.8 million. While segmental volumes increased 5%, revenue per unit tumbled 17%.
Coal’s revenues came in at $430 million, down 4% year over year. Actual segmental revenues fell short of our anticipation of $441.1 million. Coal volumes inched up 1% year over year. Revenue per unit fell 5% in the reported quarter.
Liquidity
Norfolk Southern exited 2023 with cash and cash equivalents of $1,568 million compared with $456 million at the end of 2022. NSC had a long-term debt of $17,175 million at the end of the year compared with $14,479 million at 2022-end.
Outlook
Norfolk Southern expects 2024 revenues to increase 3% from 2023 actuals. NSC aims to take measures to increase its productivity as the year goes on.
Q4 Performances of Some Other Transportation Companies
Delta Air Lines’ (DAL - Free Report) fourth-quarter 2023 earnings (excluding $1.88 from non-recurring items) of $1.28 per share comfortably beat the Zacks Consensus Estimate of $1.17. Earnings, however, declined 13.5% on a year-over-year basis due to high labor costs.
Revenues of $14,223 million surpassed the Zacks Consensus Estimate of $14,069.5 million and increased 5.9% on a year-over-year basis, driven by strong holiday-air-travel demand. Adjusted operating revenues (excluding third-party refinery sales) came in at $13,661 million, up 11% year over year.
United Airlines (UAL - Free Report) reported fourth-quarter 2023 earnings per share (excluding 19 cents from non-recurring items) of $2.00, which outpaced the Zacks Consensus Estimate of $1.61 but declined 18.7% year over year.
Operating revenues of $13,626 million beat the Zacks Consensus Estimate of $13,546.8 million. The top line increased 9.9% year over year due to upbeat air-travel demand. Cargo revenues fell 14.8% year over year to $402 million. Revenues from other sources jumped 10.6% year over year to $803 million.
J.B. Hunt Transport Services (JBHT - Free Report) fourth-quarter 2023 earnings per share of $1.47 missed the Zacks Consensus Estimate of $1.74 and declined 23.4% year over year.
Total operating revenues of $3,303.70 million surpassed the Zacks Consensus Estimate of $3,236.2 million but fell 9.5% year over year. Total operating revenues, excluding fuel surcharge revenues, decreased approximately 6% year over year.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Norfolk Southern (NSC) Q4 Earnings & Revenues Lag, Stock Falls
Norfolk Southern Corporation (NSC - Free Report) reported lackluster fourth-quarter 2023 results, with both the top and bottom lines missing the Zacks Consensus Estimate. A weak freight market hurt results. The below-par results naturally disappointed investors, resulting in the stock losing value in early trading.
Quarterly earnings (excluding 51 cents from non-recurring items) of $2.83 per share fell short of the Zacks Consensus Estimate of $2.90 and declined 17.2% year over year. Results were hurt by high costs. Overall volumes increased 3%. Total revenue per unit declined 8% in the final quarter of 2023.
Railway operating revenues were $3,073 million in the quarter under review, lagging the Zacks Consensus Estimate of $3,109.4 million. The top line decreased 5.1% year over year, with all key segments including Merchandise, Intermodal and Coal registering deterioration in revenues. Total revenue per unit dipped 8% year over year. Income from railway operations decreased 32% to $808 million, including a charge of $150 million associated with the Eastern Ohio incident.
Railway operating expenses shot up 10% on a year-over-year basis to $2,265 million, primarily due to a double-digit increase in expenses on compensation and benefits apart from the expenditure of Ohio derailment. Norfolk Southern’s operating ratio (operating expenses as a percentage of revenues) deteriorated to 68.8% in the fourth quarter from 63.5% in the year-ago quarter due to higher costs and lackluster revenues. A lower value of the metric is preferable. Our estimate for this metric was 67.4%.
Segmental Performance
Merchandise’s revenues declined 1% year over year to $1,849 million. Actual segmental revenues were lower than our estimate of $1,896.1 million. Volumes were flat, whereas revenue per unit declined 1% year over year.
Revenues from Intermodal plunged 13% year over year to $794 million. Actual segmental revenues were higher than our projection of $765.8 million. While segmental volumes increased 5%, revenue per unit tumbled 17%.
Coal’s revenues came in at $430 million, down 4% year over year. Actual segmental revenues fell short of our anticipation of $441.1 million. Coal volumes inched up 1% year over year. Revenue per unit fell 5% in the reported quarter.
Liquidity
Norfolk Southern exited 2023 with cash and cash equivalents of $1,568 million compared with $456 million at the end of 2022. NSC had a long-term debt of $17,175 million at the end of the year compared with $14,479 million at 2022-end.
Outlook
Norfolk Southern expects 2024 revenues to increase 3% from 2023 actuals. NSC aims to take measures to increase its productivity as the year goes on.
Currently, Norfolk Southern carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Q4 Performances of Some Other Transportation Companies
Delta Air Lines’ (DAL - Free Report) fourth-quarter 2023 earnings (excluding $1.88 from non-recurring items) of $1.28 per share comfortably beat the Zacks Consensus Estimate of $1.17. Earnings, however, declined 13.5% on a year-over-year basis due to high labor costs.
Revenues of $14,223 million surpassed the Zacks Consensus Estimate of $14,069.5 million and increased 5.9% on a year-over-year basis, driven by strong holiday-air-travel demand. Adjusted operating revenues (excluding third-party refinery sales) came in at $13,661 million, up 11% year over year.
United Airlines (UAL - Free Report) reported fourth-quarter 2023 earnings per share (excluding 19 cents from non-recurring items) of $2.00, which outpaced the Zacks Consensus Estimate of $1.61 but declined 18.7% year over year.
Operating revenues of $13,626 million beat the Zacks Consensus Estimate of $13,546.8 million. The top line increased 9.9% year over year due to upbeat air-travel demand. Cargo revenues fell 14.8% year over year to $402 million. Revenues from other sources jumped 10.6% year over year to $803 million.
J.B. Hunt Transport Services (JBHT - Free Report) fourth-quarter 2023 earnings per share of $1.47 missed the Zacks Consensus Estimate of $1.74 and declined 23.4% year over year.
Total operating revenues of $3,303.70 million surpassed the Zacks Consensus Estimate of $3,236.2 million but fell 9.5% year over year. Total operating revenues, excluding fuel surcharge revenues, decreased approximately 6% year over year.