Norfolk Southern Q2: 8% Revenue Decline, Higher Operating Expenses & More

Norfolk Southern Corp NSC reported a second-quarter FY23 railway operating revenue decline of 8% year-over-year to $2.98 billion, missing the consensus of $3.08 billion.

Adjusted EPS was $2.95, below the consensus of $3.11.

Sales by segments: Merchandise $1.83 billion (-1% Y/Y), Intermodal $745 million (-25% Y/Y), and Coal $409 million (-4% Y/Y).

The company stated that the results include a $416 million charge associated with the incident in Eastern Ohio and do not reflect any amounts potentially recoverable under the company's insurance policies.

Railway operating expenses increased by 21% Y/Y to $2.40 billion.

Income from railway operations halved to $576 million. Adjusting for the Eastern Ohio Incident, income from railway operations was $992 million (-22% Y/Y).

Operating cash flow year-to-date totaled $1.85 billion versus $2.01 billion a year ago.

Norfolk Southern held $556 million in cash and cash equivalents at the end of the quarter.

The company repurchased and retired 1.3 million shares in the first six months of 2023 for $303 million.

Price Action: NSC shares are trading lower by 0.83% at $234.96 on the last check Thursday.