Norfolk Southern Increases Sales but Misses Revenue Estimate

Seth Jayson, The Motley Fool
Updated

Norfolk Southern (NYS: NSC) reported earnings on July 24. Here are the numbers you need to know.

The 10-second takeaway
 For the quarter ended June 30 (Q2), Norfolk Southern missed slightly on revenues and beat expectations on earnings per share.

Compared to the prior-year quarter, revenue was unchanged and GAAP earnings per share grew slightly.


Gross margins increased, operating margins improved, net margins dropped.

Revenue details
 Norfolk Southern reported revenue of $2.87 billion. The 19 analysts polled by S&P Capital IQ foresaw revenue of $2.93 billion on the same basis. GAAP reported sales were 0.3% higher than the prior-year quarter's $2.87 billion.

Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
 EPS came in at $1.60. The 26 earnings estimates compiled by S&P Capital IQ averaged $1.52 per share. GAAP EPS of $1.60 for Q2 were 2.6% higher than the prior-year quarter's $1.56 per share.

Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
 For the quarter, gross margin was 40.5%, 250 basis points better than the prior-year quarter. Operating margin was 32.5%, 200 basis points better than the prior-year quarter. Net margin was 18.2%, 120 basis points worse than the prior-year quarter.

Looking ahead
 Next quarter's average estimate for revenue is $2.98 billion. On the bottom line, the average EPS estimate is $1.64.

Next year's average estimate for revenue is $11.62 billion. The average EPS estimate is $5.88.

Investor sentiment
 The stock has a four-star rating (out of five) at Motley Fool CAPS, with 1,147 members out of 1,181 rating the stock outperform, and 34 members rating it underperform. Among 315 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 307 give Norfolk Southern a green thumbs-up, and eight give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Norfolk Southern is outperform, with an average price target of $84.64.

Can your portfolio provide you with enough income to last through retirement? You'll need more than Norfolk Southern. Learn how to maximize your investment income and "Secure Your Future With 9 Rock-Solid Dividend Stocks." Click here for instant access to this free report.

The article Norfolk Southern Increases Sales but Misses Revenue Estimate originally appeared on Fool.com.

Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor ofMotley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © 1995 - 2012 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

Advertisement