Norfolk Southern Earnings on the Horizon

S&P 500 (NYSE:SPY) component Norfolk Southern (NYSE:NSC) will unveil its latest earnings on Tuesday, October 23, 2012. Norfolk Southern is engaged in rail transportation of raw materials, intermediate products, and finished goods.

Norfolk Southern Earnings Preview Cheat Sheet

Wall St. Earnings Expectations: The average analyst estimate is for profit of $1.23 per share, a decline of 22.6% from the company’s actual earnings for the year-ago quarter. During the past three months, the average estimate has moved down from $1.64. Between one and three months ago, the average estimate was unchanged. It has since dropped over the last month. Analysts are projecting profit to rise by 3.6% compared to last year’s $5.43.

Past Earnings Performance: The company is looking to beat analyst estimates for the third quarter in a row. Last quarter, it beat estimates with net income of $1.60 per share against the mean estimate of $1.53. In the prior quarter, the company reported profit of $1.23.

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Stock Price Performance: Between August 21, 2012 and October 17, 2012, the stock price had fallen $7.67 (-10.2%), from $74.88 to $67.21. The stock price saw one of its best stretches over the last year between September 28, 2012 and October 8, 2012, when shares rose for seven straight days, increasing 5.7% (+$3.65) over that span. It saw one of its worst periods between January 19, 2012 and January 31, 2012 when shares fell for nine straight days, dropping 7.4% (-$5.74) over that span.

Wall St. Revenue Expectations: Analysts are projecting a decline of 6.2% in revenue from the year-earlier quarter to $2.71 billion.

A Look Back: In the second quarter, profit fell 5.9% to $524 million ($1.60 a share) from $557 million ($1.56 a share) the year earlier, but exceeded analyst expectations. Revenue rose 0.3% to $2.87 billion from $2.87 billion.

Key Stats:

The company is looking to get back on track with this earnings announcement after a profit drop last quarter snapped a positive string of results. Net income rose 24.5% in the third quarter of the last fiscal year, 19.4% in the fourth quarter of the last fiscal year and 26.2% in the first quarter before declining in the second quarter.

On the top line, the company is looking to build on four-straight revenue increases heading into this earnings announcement. Revenue rose 17.6% in the third quarter of the last fiscal year, 16.9% in the fourth quarter of the last fiscal year and 6.5% in the first quarter before increasing again in the second quarter.

Balance Sheet Analysis: The company’s current ratio of assets to liabilities came in at 1.06 last quarter. The current ratio is an indication of a firm’s liquidity and ability to meet creditor demands and generally, for every dollar the company owes in the short term, it has that figure available in assets that can be converted to cash in the short term.

Analyst Ratings: There are mostly holds on the stock with 13 of 25 analysts surveyed giving that rating.

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(Company fundamentals by Xignite Financials. Earnings estimates provided by Zacks)

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