Why Is Norfolk Southern Stock Taking A Hit Today?

Norfolk Southern Corporation NSC shares are trading lower following worse-than-expected first-quarter FY24 financial results.

Railway operating revenue declined 4% Y/Y to $3.004 billion, missing the consensus of $3.046 billion.

Sales by segments: Merchandise $1.86 billion (-1% Y/Y), Intermodal $745 million (-8% Y/Y), and Coal $396 million (-10% Y/Y).

Railway operating expenses increased by 15% Y/Y to $2.79 billion. Income from railway operations declined by 70% Y/Y to $213 million. 

Adjusted EPS was $2.49 (-25% Y/Y), below the consensus of $2.58.

Operating cash flow totaled $839 million versus $1.17 billion a year ago. Norfolk Southern held $652 million in cash and cash equivalents at the end of the quarter.

Dividend: The company declared a quarterly dividend of $1.35 per share, payable on May 20, 2024, to shareholders of record on May 3, 2024.

The company said that first-quarter FY24 results were in line with the preliminary results announced on April 9. 

The report highlights a significant financial impact from a $600 million settlement related to the East Palestine derailment class action lawsuit, compensating without admitting fault. This move reflects their commitment to aid affected communities and pursue insurance for the settlement.

Also Read: Norfolk Southern to Pay $600M in Ohio Train Derailment Lawsuit

Investors can gain exposure to the stock via TCW Transform Supply Chain ETF SUPP and First Trust Nasdaq Transportation ETF FTXR.

Price Action: NSC shares are trading lower by 4.4% at $234.23 at the last check Wednesday.

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