Norfolk Southern, Adobe Cut Outlook

While the currency printers, print, and will do so until the complete collapse of the current monetary regime, corporate revenues continue to collapse. The latest casualty: concurrent economic activity indicator Norfolk Southern, which just slashed its Q3 EPS forecast to $1.18-$1.25 on Wall Street expectations of a $1.63 print. This will be lower than a year ago. The reason: reduced coal and merchandise shipments will lead to a $120 revenue decline. Then again, in Bernanke's world, neither energy nor actual trade are important. Print on, and BTFD!

From the release:

Norfolk Southern Corporation (NSC) announced that third quarter 2012 earnings are expected to be in the range of $1.18 to $1.25 per diluted share, primarily due to volume declines in certain markets and lower revenues from fuel surcharges.


Decreased coal and merchandise shipments, offset in part by growth in intermodal volumes, are together expected to reduce revenues by approximately $120 million compared with third quarter 2011.


Fuel surcharge revenues are anticipated to be approximately $80 million below the same period last year.  Third quarter 2011 fuel surcharge revenues included a favorable lag-effect of $52 million, whereas results for the current quarter are expected to be impacted by an unfavorable lag-effect in the range of $25 to $30 million.

And just because rails are such a non-sexy industry, relevant to really nobody when there are iPads to be had, here comes Adobe, chiming in as well, by guiding lower on both the top and bottom line:

  • ADBE sees Q4 revenue of $1.08-$1.13 billion; Wall Street estimates were for a $1.21 billion print
  • EPS are now expected to be $0.53-$0.58; Est: $0.67

Remember: cash flows, and thus profits, are obsolete. Repeat after us:

  • All that matters is multiple expansion.
  • All that matters is multiple expansion.
  • All that matters is multiple expansion.


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