Yahoo Finance Norfolk Southern (NSC) Q3 Earnings: What's in Store?
Norfolk Southern Corporation NSC is scheduled to release third-quarter 2018 results on Oct 24, before market open.
In the second quarter of 2018, the company reported better-than-expected earnings and revenues. Moreover, the bottom line improved significantly yearoveryear on the back of the tax reform policy. Also, the top line improved on a year-over-year basis.
Norfolk Southern has an impressive surprise history, outpacing estimates in each of the trailing four quarters with an average beat of 8.1%.
Factors at Play
Norfolk Southern is expected to perform well in the third quarter on the back of volume growth. At the Cowen and Company 11th Annual Global Transportation Conference, the company stated that overall volumes for the to-be-reported quarter have expanded 5.7% on a year-over-year basis as of Sep 1.Impressive performances in the chemicals, agriculture intermodal and automotive segments have led to this bullish scenario.
The company’s cost-cutting efforts are also anticipated to drive the bottom line in the upcoming quarterly results. This, in turn, is likely to improve the operating ratio (operating expenses as a percentage of revenues).
Moreover, strong intermodal revenues are expected to boost the company’s results in the upcoming quarterly results as well. The Zacks Consensus Estimate for third-quarter intermodal revenues is pegged at $733 million, reflecting a rise of $714 million reported in the second quarter of 2018.
However, escalating fuel prices and costs related to overall lower network velocity could push up operating expenses and hurt the bottom line.
Additionally, we are also concerned about the company’s high debt-laden balance sheet. Apart from a rise in immediate finance costs, high-debt level requires significant cash flows for repayments.
Norfolk Southern Corporation Price and EPS Surprise
Norfolk Southern Corporation Price and EPS Surprise | Norfolk Southern Corporation Quote
What Does the Model Say?
Our proven model does not show conclusively that Norfolk Southern is likely to beat estimates this quarter. This is because a stock needs to have a positive Earnings ESP and a solid Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. However, that is not the case here as elaborated below.
Zacks Rank: Norfolk Southern carries a Zacks Rank #2.
Earnings ESP: However, Norfolk Southern has an Earnings ESP of 0.00%. The Most Accurate Estimate of $2.44 per share is in line with the Zacks Consensus Estimate. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Conversely, we caution against stocks with a Zacks Rank #4 (Sell) or 5 (Strong Sell) going into an earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks to Consider
Investors interested in the broader Transportation sector may consider Union Pacific Corporation UNP, Old Dominion Freight Line, Inc. ODFL and C.H. Robinson Worldwide, Inc. CHRW as these stocks too possess the right combination of elements to come up with an earnings beat in their next releases.
Union Pacific has an Earnings ESP of +0.33% and a Zacks Rank #2. The company will report third-quarter earnings on Oct 25. You can see the complete list of today’s Zacks #1 Rank stocks here.
Old Dominion Freight Line has an Earnings ESP of +0.26% and a Zacks Rank #2. The company will release third-quarter 2018 results on Oct 25.
C.H. Robinson has an Earnings ESP of +0.56% and a Zacks Rank of 2. The company will announce third-quarter financial figures on Oct 30.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +21.9% in 2017, our top stock-picking screens have returned +115.0%, +109.3%, +104.9%, +98.6%, and +67.1%.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - 2017, the composite yearly average gain for these strategies has beaten the market more than 19X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
See Them Free>>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Union Pacific Corporation (UNP) : Free Stock Analysis Report
Norfolk Southern Corporation (NSC) : Free Stock Analysis Report
C.H. Robinson Worldwide, Inc. (CHRW) : Free Stock Analysis Report
Old Dominion Freight Line, Inc. (ODFL) : Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
