Is a Beat in Store for Norfolk Southern in Q3 Earnings?

Norfolk Southern Corporation NSC is scheduled to report third-quarter 2024 results on Oct. 22, before market open.

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The company has a disappointing earnings surprise history, having lagged the Zacks Consensus Estimate in three of the preceding four quarters (surpassed once), the average miss being 0.45%.

Let’s see how things have shaped up for NSC this earnings season.

NSC’s Q3 Expectations

The Zacks Consensus Estimate for NSC’sthird-quarter 2024 revenues is pegged at $3.09 billion, indicating 4% growth year over year. The top line is likely to have benefited from solid performances of its Merchandise segment, partially offset by weakness across its Coal segment.

The Zacks Consensus Estimate for the third-quarter Merchandise revenues is pegged at $771.07 million, indicating 4.6% growth from the year-ago reported figure. The consensus mark for Coalsegment revenues is pegged at $417.87million, implying a 3.7% decrease from the third-quarter 2023 reported number.

On the flip side, weakness pertaining to freight revenues and volumes do not bode well for NSC. The company's high debt load and share price volatility are also causes for worry. The Zacks Consensus Estimate for NSC’s third-quarter 2024 earnings has remained constant at $3.10 per share in the past 90 days.

What Our Model Says for NSC

Our proven model predicts an earnings beat for Norfolk Southern this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter.

Norfolk Southern has an Earnings ESP of +0.02% and a Zacks Rank #3.

NSC’s Q2 Highlights

Quarterly earnings of $3.06 per share surpassed the Zacks Consensus Estimate of $2.85 and improved 4% year over year.

Railway operating revenues were $3.04 billion in the second quarter, surpassing the Zacks Consensus Estimate of $3.02 billion. The top line increased 2% year over year, with strength across its Merchandise segment.

Stocks to Consider

Here are a few stocks from the broader Zacks Transportation sector that investors may consider, as our model shows that these have the right combination of elements to beat on earnings this reporting cycle.

Southwest Airlines LUV has an Earnings ESP of +68.16% and a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

LUV is set to release third-quarter results on Oct. 24. Upbeat air-travel demand is likely to have aided the quarterly performance.

The Zacks Consensus Estimate for third-quarter 2024 earnings has moved north 116.7% in the past 60 days to 4 cents per share. LUV’s earnings surpassed the Zacks Consensus Estimate in two of the preceding four quarters, missed once and met in the other, delivering an average surprise of 61.6%.

C.H. Robinson CHRW has an Earnings ESP of +5.14% and a Zacks Rank #3 at present. CHRW is scheduled to report third-quarter 2024 earnings on Oct. 30. Low operating costs are expected to have aided CHRW’s performance in the to-be-reported quarter.

The Zacks Consensus Estimate for third-quarter earnings has been revised 1.9% upward in the past 60 days. CHRW’s earnings beat the Zacks Consensus Estimate in three of the preceding four quarters and missed once, the average beat being 7.3%.

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