4Q 2009 Rail Earnings Reports
January 2010
Norfolk Southern: (reported January 27,
2010)
Price: $50.43
Price direction after earnings report: down
á
Reported
earnings per share of $.82, slightly below consensus of $.84 per share, and helped
by $.03 from a lower-than-expected tax rate
á
Revenues
declined 16% year over year
á
Margins
were under extreme pressure in the quarter as fuel and labor costs increased
á
Increases
in labor costs should continue to be a headwind in 2010 as healthcare costs
increase and incentive pay is phased back in
á
Coal
volumes were extremely weak, falling 20%+ over last year. This profitable segment continues to
struggle
á
Headcount
fell 9% in the quarter
á
Core
pricing was up 4%, which was a sharp slowdown from price increases in the third
quarter of 7%
á
Increasing
automotive volumes should help in 2010
á
Analyst
Opinion:
o
Ed
Wolfe of Wolfe Research: Rating is Outperform with price target $62
o
Tom
Wadewitz of JP Morgan: Rating is Neutral with price target $57
o
Matt
Troy of Citigroup: Rating is Buy with price target $53
o
Gary
Chase of Barclays: Rating is Hold with price target $55