Norfolk Southern’s Q2 2016 Earnings Preview: Lower Shipments And Fuel Surcharge Revenue To Weigh On Results

-10.40%
Downside
256
Market
230
Trefis
NSC: Norfolk Southern logo
NSC
Norfolk Southern

We expect Norfolk Southern’s Q2 earnings to be negatively impacted by top line headwinds in the form of lower shipment volumes and fuel surcharge revenue. The decline in Norfolk Southern’s Q2 shipments was largely driven by a decline in coal shipments as a result of lower demand for the commodity by utilities amid soft natural gas prices. In addition to the decline in shipment volumes, lower fuel surcharge revenue as a result of a decline in crude oil prices will also contribute to a decline in the company’s revenue. However, lower operating expenses, particularly fuel-related expenses, will partially offset the impact of lower revenue on earnings.

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Notes:

1) The purpose of these analyses is to help readers focus on a few important things. We hope such lean communication sparks thinking, and encourages readers to comment and ask questions on the comment section, or email content@trefis.com
2) Figures mentioned are approximate values to help our readers remember the key concepts more intuitively. For precise figures, please refer to our complete analysis for Norfolk Southern

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