Norfolk Southern Q1 Earnings Miss Estimates, Revenue Beat

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]