Summary
Norfolk Southern Corporation (NSC) reported a significant decline in net income for the third quarter and the first nine months of 2009, largely attributed to the weakening economic environment. Railway operating revenues decreased by 29% in the third quarter and 28% for the nine-month period, primarily driven by lower traffic volumes across all segments, particularly in coal and general merchandise, and reduced fuel surcharge revenue. Operating expenses were also reduced by 25% in the quarter and 24% for the nine months, mainly due to lower volume-related costs, decreased fuel prices, and expense reduction initiatives, though this was partially offset by increased wage rates and pension expenses. Despite the challenging economic climate, NSC maintained a strong liquidity position with $999 million in cash and cash equivalents as of September 30, 2009. The company actively managed its financial condition by issuing new debt to fund operations and capital expenditures, while also suspending share repurchases. Management remains focused on operational efficiency and safety, positioning NSC to capitalize on future economic recovery.
Financial Highlights
44 data points| Revenue | $2.06B |
| Operating Expenses | $1.50B |
| Operating Income | $562.00M |
| Interest Expense | $118.00M |
| Net Income | $303.00M |
| EPS (Basic) | $0.82 |
| EPS (Diluted) | $0.81 |
| Shares Outstanding (Basic) | 367.30M |
| Shares Outstanding (Diluted) | 372.50M |
Key Highlights
- 1Net income for the third quarter of 2009 was $303 million, a decrease of 42% compared to $520 million in the third quarter of 2008.
- 2Railway operating revenues declined 29% in Q3 2009 to $2.1 billion, driven by a 20% decrease in volumes and lower fuel surcharges.
- 3Operating expenses decreased by 25% in Q3 2009 to $1.5 billion, primarily due to lower volume-related expenses and reduced fuel prices.
- 4The railway operating ratio worsened to 72.8% in Q3 2009 from 69.1% in Q3 2008, indicating higher operating expenses relative to revenues.
- 5Cash provided by operating activities for the first nine months of 2009 was $1.4 billion, down from $2.1 billion in the prior year period.
- 6Total assets grew to $27.1 billion as of September 30, 2009, from $26.3 billion at the end of 2008, with an increase in cash and investments.
- 7Long-term debt increased to $6.7 billion from $6.2 billion, reflecting new debt issuances.