Why Is Norfolk Southern Stock Taking A Hit Today?

‘Norfolk Southern Corp NSC reported a fourth-quarter fiscal 2023 railway operating revenue decline of 5% year-over-year to $3.073 billion, versus the consensus of $3.08 billion.

Adjusted EPS was $2.83 (-17% Y/Y), below the consensus of $2.87.

Sales by segments: Merchandise $1.85 billion (-1.4% Y/Y), Intermodal $794 million (-13% Y/Y), and Coal $430 million (-4% Y/Y).

Railway operating expenses increased by 10.2% Y/Y to $2.265 billion. Income from railway operations declined by 31.6% Y/Y to $808 million. Adjusting for the Eastern Ohio Incident, income from railway operations was $958 million (-19% Y/Y).

Operating cash flow for the fiscal 2023 totaled $3.18 billion versus $4.22 billion a year ago.

Norfolk Southern held $1.568 billion in cash and cash equivalents at the end of the quarter.

NSC repurchased and retired 2.8 million and 12.6 million shares of common stock under stock repurchase programs in 2023 and 2022, for $627 million and $3.1 billion, respectively.

2024 Outlook: Norfolk Southern expects revenue growth of ~3% YoY and CapEx flat with 2023 ~$2.3 billion.

Regarding its three-year outlook, the company expects a roadmap to 100-150bps margin improvement annually, narrowing the gap with peers.

Norfolk Southern President and Chief Executive Officer Alan H. Shaw commented, “Norfolk Southern enters 2024 with positive momentum and a focus on driving further productivity gains and operational discipline through aggressive cost management.”

Also Read: Railroad Franchise Union Pacific On The Right Track? Exceeds Q4 Expectations But Warns On Muted Volume Outlook

Price Action: NSC shares are trading lower by 3.21% at $230.22 on the last check Friday.

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