Why Is Norfolk Southern Stock Taking A Hit Today?
Portfolio Pulse from Akanksha Bakshi
Norfolk Southern Corp (NYSE:NSC) reported a decline in Q4 railway operating revenue by 5% Y/Y to $3.073 billion, missing consensus estimates. Adjusted EPS also fell to $2.83, below the expected $2.87. Segment-wise, Merchandise, Intermodal, and Coal sales all decreased Y/Y. Operating expenses rose by 10.2%, and income from railway operations dropped by 31.6% Y/Y, or 19% when adjusted for the Eastern Ohio Incident. Operating cash flow and cash holdings also decreased compared to the previous year. NSC repurchased shares worth $627 million in 2023. For 2024, the company forecasts ~3% revenue growth and flat CapEx of ~$2.3 billion, with a three-year outlook aiming for margin improvement. Shares fell by 3.21% to $230.22.
January 26, 2024 | 5:26 pm
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Norfolk Southern reported lower than expected Q4 earnings and revenue, with a decline in sales across all segments and increased operating expenses. The company's stock price dropped following the report.
The negative earnings report, with a miss on both top and bottom lines, typically leads to a decline in investor confidence and a short-term negative impact on the stock price. The reported decline in sales and increased expenses further justify the negative outlook. The stock price has already reacted with a 3.21% drop, indicating immediate market response to the earnings miss.
CONFIDENCE 90
IMPORTANCE 90
RELEVANCE 100