Norfolk Southern Corporation (NYSE:NSC) Q1 2025 Earnings Conference Call April 23, 2025 8:45 AM ET Company Participants Luke Nichols - Senior Director of IR Mark George - President and CEO John Orr - EVP and COO Ed Elkins - Chief Commercial Officer Jason Zampi - EVP, Treasurer, and CFO Conference Call Participants Kenneth Hoexter - Bank of America Christian Wetherbee - Wells Fargo Scott Group - Wolfe Research Brian Ossenbeck - JPMorgan Jonathan Chappell - Evercore ISI Jason Seidl - TD Cowen Brandon Oglenski ...

Core Insights - Norfolk Southern Corporation (NSC) reported first-quarter 2025 earnings of $2.69 per share, missing the Zacks Consensus Estimate of $2.72, but showing an 8% year-over-year increase due to lower costs [1] - Railway operating revenues were $2.99 billion, nearly in line with estimates, but decreased by 0.4% year over year [1] Financial Performance - Overall volumes increased by 1% year over year, while total revenue per unit dipped by 2% [2] - Income from railway operations rose over 100% year over year to $1.15 billion, and railway operating expenses declined by 34% to $1.85 billion, primarily due to a significant decrease in fuel expenses [2] Management Commentary - NSC's CEO, Mark George, highlighted the company's resilience in overcoming challenges from a disruptive winter storm season, resulting in improved operating ratios and earnings growth [3] Segmental Performance - Merchandise revenues remained flat year over year at $1.86 billion, below the estimate of $1.91 billion, with revenue per unit increasing by 2% [5] - Intermodal revenues rose by 2% year over year to $760 million, although below the projection of $778.2 million, with segmental volumes increasing by 3% but revenue per unit declining by 1% [5] - Coal revenues were $370 million, down 7% year over year, but exceeded the projection of $347.1 million, with coal volumes falling by 1% and revenue per unit declining by 5% [6] Liquidity and Share Buyback - At the end of the first quarter, NSC had cash and cash equivalents of $1.01 billion, down from $1.64 billion in the previous quarter, with long-term debt remaining flat at $16.6 billion [7] - The company repurchased and retired 1 million shares for $250 million during the first quarter [7] 2025 Guidance - For 2025, NSC anticipates revenue growth of 3% and a 150 basis points improvement in the operating ratio, with capital expenditure expected to be around $2.20 billion [8]

Norfolk Southern (NSC) came out with quarterly earnings of $2.69 per share, missing the Zacks Consensus Estimate of $2.72 per share. This compares to earnings of $2.49 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of -1.10%. A quarter ago, it was expected that this railroad would post earnings of $2.95 per share when it actually produced earnings of $3.04, delivering a surprise of 3.05%.Over the last four quarters, the company ...

Financial Data and Key Metrics Changes - The company reported an 8% growth in EPS on an adjusted basis, driven by $55 million in labor productivity savings despite incurring $35 million in storm restoration costs [6][7][28] - The operating ratio for the quarter was 67.9, which includes 120 basis points from storm restoration costs, reflecting a 200 basis point improvement year over year [28][29] - Net income and EPS improved by 8% year over year, with operating expenses down 3% on higher volumes [31] Business Line Data and Key Metrics Changes - Overall volume rose 1% year over year, with total revenue flat; however, total revenue less fuel was up 2% [21] - Merchandise volume fell due to weakness in metals and construction, while chemicals and agriculture saw gains [21] - Intermodal volume increased by 3% year over year, with slight RPU growth due to stabilization in truck pricing [22] Market Data and Key Metrics Changes - The company expects strength in the auto sector in the near term, although tariffs could pose a headwind [23] - Continued strength in chemicals markets is anticipated, with a focus on recapturing market share [24] - Coal prices remain pressured, with expectations of tempered production amid uncertainty around export trade [25] Company Strategy and Development Direction - The company is focused on safety, network performance, customer service, and cost control as part of its operational strategy [9] - The PSR 2.0 transformation is aimed at unlocking network value and delivering on financial commitments, with a zero-based operating plan being implemented [17][20] - The company is committed to maintaining quality service and is actively working to regain market share lost to competitors [68] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenges posed by severe winter weather but expressed confidence in the company's ability to navigate these disruptions [5][6] - The company reiterated its full-year guidance of 3% revenue growth and 150 basis points of operating ratio improvement, while acknowledging uncertainty due to tariffs and economic conditions [32][33] - Management emphasized the importance of staying close to customers to adapt to changing market conditions and to capitalize on opportunities [26][33] Other Important Information - The company has resumed share repurchases, buying back nearly $250 million of shares in the quarter [31] - Insurance recoveries related to an incident in Eastern Ohio provided a net benefit of $185 million in the quarter [28] Q&A Session Summary Question: Operating ratio performance and targets - The management discussed the operating ratio and the impact of cost savings, indicating that the second quarter should see improvements [35][36] Question: Yield and pricing environment - Management noted that merchandise yields increased due to improved service, while intermodal pricing remains flat [42][45] Question: Cost management in a declining volume scenario - Management expressed confidence in their ability to manage costs effectively, even in a scenario of declining volumes [52][56] Question: Land sale timing and network performance - The company expects land sales to remain in the $30 million to $40 million range for the year, with network performance recovering well [61][64] Question: Share gains and tariff impacts - Management highlighted progress in regaining market share and discussed the potential mixed impacts of tariffs on different segments [112][114]

Financial Performance - Total railway operating revenues for Q1 2025 were $2,993 million, a slight decrease of 0.4% from $3,004 million in Q1 2024[2] - Net income for Q1 2025 increased significantly to $750 million, compared to $53 million in Q1 2024, representing a growth of 1,320%[2] - Earnings per share (diluted) rose to $3.31 in Q1 2025, compared to $0.23 in Q1 2024, marking a substantial increase of 1,341%[2] - Total railway operating expenses decreased to $1,847 million in Q1 2025 from $2,791 million in Q1 2024, a reduction of 33.8%[2] - Cash flows from operating activities for Q1 2025 were $950 million, up from $839 million in Q1 2024, indicating a growth of 13.2%[6] Shareholder Actions - The company repurchased and retired 1.0 million shares of common stock at a cost of $250 million in Q1 2025, while no shares were repurchased in Q1 2024[10] Insurance and Incident Recovery - The Eastern Ohio incident resulted in a net insurance recovery of $185 million in Q1 2025, compared to expenses of $592 million in Q1 2024[8] Asset Management - Current assets decreased to $2,701 million as of March 31, 2025, from $3,188 million at the end of 2024, a decline of 15.3%[4] - Total assets increased slightly to $43,800 million as of March 31, 2025, compared to $43,682 million at the end of 2024, an increase of 0.3%[4] - Long-term debt remained stable at $16,660 million as of March 31, 2025, compared to $16,651 million at the end of 2024[4]

ATLANTA, April 23, 2025 /PRNewswire/ -- Norfolk Southern Corporation (NYSE: NSC) announced Wednesday its first quarter 2025 financial results. For the quarter, revenue was $3.0 billion, income from railway operations was $1.1 billion, operating ratio was 61.7%, and diluted earnings per share were $3.31. After adjusting the results to exclude the Eastern Ohio incident, first quarter income from railway operations was $961 million, the operating ratio was 67.9%, and diluted earnings per share were $2.69. Insu ...

Core Viewpoint - The U.S. Supreme Court has dismissed CSX Transportation's antitrust lawsuit against Norfolk Southern Corporation, impacting the competitive landscape in the rail industry [1] Group 1 - The Supreme Court's decision reinforces Norfolk Southern's market position and may deter future antitrust claims from competitors like CSX [1] - The ruling is significant for the rail industry, as it sets a precedent regarding the legal boundaries of competition and antitrust litigation [1] - CSX's attempt to challenge Norfolk Southern's practices highlights ongoing tensions within the rail sector regarding competition and market share [1]

The upcoming report from Norfolk Southern (NSC) is expected to reveal quarterly earnings of $2.72 per share, indicating an increase of 9.2% compared to the year-ago period. Analysts forecast revenues of $2.99 billion, representing a decrease of 0.4% year over year.Over the past 30 days, the consensus EPS estimate for the quarter has been adjusted downward by 1.9% to its current level. This demonstrates the covering analysts' collective reassessment of their initial projections during this period.Prior to a ...

Core Viewpoint - Norfolk Southern Corporation (NSC) is expected to report first-quarter 2025 results on April 23, with earnings estimates revised downward by 5.2% to $2.72, indicating a 9.2% increase year-over-year, while revenues are projected at $3.01 billion, reflecting a 0.1% rise from the previous year [1]. Group 1: Earnings Performance - NSC's earnings have lagged the Zacks Consensus Estimate once in the last four quarters, surpassing it in the other three, with an average rise of 2.9% [2]. - The model does not predict an earnings beat for NSC this quarter, with an Earnings ESP of -0.60% and a Zacks Rank of 3 (Hold) [7]. Group 2: Factors Influencing Performance - The first-quarter top-line performance is expected to be negatively impacted by inflation, high interest rates, tariff uncertainties, weak freight demand, and supply-chain disruptions [3]. - E-commerce demand is driving shipment volumes for NSC, which is likely to positively influence results [5]. - However, softness in freight revenues and volumes is anticipated to negatively affect performance in the upcoming quarter [6]. Group 3: Segment Performance - The Intermodal segment's revenue consensus is $767.6 million, indicating a 3% increase from Q1 2024, while the Coal segment's revenue consensus is $368.8 million, reflecting a 7% decrease from the same period [4]. Group 4: Previous Earnings Highlights - In Q4 2024, NSC reported earnings of $3.04 per share, beating the Zacks Consensus Estimate of $2.95, with a year-over-year increase of 7.4% due to lower costs [8].

Norfolk Southern (NSC) shares soared 7.6% in the last trading session to close at $222.02. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 11.4% loss over the past four weeks. The stock gained following President Donald Trump's announcement that he would pause the "reciprocal" import taxes for 90 days. The President said he felt the pause was needed because "more than 75 countries" had contacted his administration to make trade d ...