Norfolk Southern stock rallies toward 5-month high after profit, revenue beats

Shares of Norfolk Southern Corp. NSC, +1.10% rose 0.8% toward a five-month high in premarket trading Wednesday, after the railroad operator reported third-quarter profit and revenue that rose above expectations, with all of its business segments beating expectations, in the face of "significant supply chain disruptions." Net income was $753 million, or $3.06 a share, after income of $569 million, or $2.22 a share, in the year-ago period. The FactSet consensus for earnings per share was $2.91. Revenue grew 13.8% to $2.85 billion, above the FactSet consensus of $2.75 billion. Total operating expenses increased 3.0% to $1.72 billion, including a 5.4% rise in compensation and benefits to $609 million. Among business segment revenue, Merchandise rose 9.9%, Intermodal grew 16% and Coal climbed 32%. Railway operating ratio improved 630 basis points to 60.2%, but was below the FactSet consensus of 60.6%. The stock, on track to open at the highest level since mid-July, has rallied 9.1% over the past three months through Tuesday, while the Dow Jones Transportation Average DJT, -0.53% has advanced 10.3% and the Dow Jones Industrial Average DJIA, -0.36% has gained 2.0%.