With the album I Often Dream of Trains, Robyn Hitchcock emerged from what has been described as an artistic slump. Norfolk Southern (NSC) has surged today after handily beating earnings, despite coal’s never-ending slump.
Reuters C’est ne pas une Norfolk Southern train. Bloomberg has the details:
Net income jumped 20 percent to $482 million, or $1.53 a share, from $402 million, or $1.24 a year earlier, the Norfolk, Virginia-based company said today in a statement. That topped the average estimate of $1.39 from 26 analysts surveyed by Bloomberg.
The increase in so-called merchandise shipping helped Norfolk Southern weather a drop in coal volumes, which have been under pressure as utilities switch to cheaper natural gas. Sand is used by oil and gas explorers for hydraulic fracturing, or fracking, to tap deposits that were previously out of reach.
Cowen’s Jason Seidl calls the report an “all-around beat.” He writes:
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NSC reported a top-to-bottom beat. This occurred despite a 3% agricultural products volume decline and 2% and 6% declines in coal traffic and revenue per unit, respectively. Intermodal traffic increased 5% via a 7% rise in Domestic (aided by new Crescent Corridor lanes and highway conversions/LTL service) and a 2% increase in International. This strength and the solid merchandise growth demonstrate NSC’s ability to grow the top line, while improving network fluidity, which has been key to delivering stellar earnings in the face of coal weakness.
Shares of Norfolk Southern have gained 5.9% to $85.34–a new 52-week high–and has given a lift to other train companies. CSX Corp. (CSX) has gained 0.6% to $26.25, Kansas City Southern (KSU) has jumped 2.2% to $123.38 and Genesee & Wyoming (GWR) has advanced 0.8% to $100.31. Union Pacific (UNP) is little changed at $154.68.
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