Summary
Norfolk Southern Corporation (NSC) reported a strong second quarter and first six months of 2010, driven by a significant rebound in railway operating revenues, up 31% and 23% year-over-year respectively. This revenue growth was primarily fueled by increased traffic volumes and higher average revenue per unit, bolstered by rising fuel surcharges. Net income for the quarter surged by 59% to $392 million ($1.04 diluted EPS), and for the six-month period, it increased by 53% to $649 million ($1.72 diluted EPS). The company's operating ratio improved to 69.8% in Q2 2010 from 74.8% in Q2 2009, indicating improved operational efficiency. NSC demonstrated robust operating cash flow generation, providing $1.4 billion in the first half of 2010, which supported capital expenditures, debt maturities, dividends, and significant share repurchases. The company also announced an expansion of its share repurchase program, authorizing the buyback of up to an additional 50 million shares. While fuel prices increased, the company benefited from higher fuel surcharges, and management believes current liquidity and cash flow are sufficient to meet ongoing obligations.
Financial Highlights
47 data points| Revenue | $2.43B |
| Operating Expenses | $1.70B |
| Operating Income | $733.00M |
| Interest Expense | $115.00M |
| Net Income | $392.00M |
| EPS (Basic) | $1.06 |
| EPS (Diluted) | $1.04 |
| Shares Outstanding (Basic) | 369.70M |
| Shares Outstanding (Diluted) | 375.10M |
Key Highlights
- 1Railway operating revenues increased significantly by 31% year-over-year in Q2 2010 to $2.43 billion, and by 23% for the first six months to $4.67 billion, driven by higher traffic volumes and improved average revenue per unit.
- 2Net income for the second quarter of 2010 was $392 million, a 59% increase compared to the prior year, resulting in diluted earnings per share of $1.04.
- 3For the first six months of 2010, net income rose 53% to $649 million, with diluted earnings per share of $1.72.
- 4The railway operating ratio improved to 69.8% in Q2 2010, down from 74.8% in Q2 2009, reflecting improved operational efficiency.
- 5Cash provided by operating activities for the first six months of 2010 was $1.38 billion, a substantial increase from $643 million in the same period of 2009.
- 6Norfolk Southern repurchased 2.0 million shares of common stock in the first six months of 2010 for $114 million and announced a new authorization to repurchase up to an additional 50 million shares.
- 7The company experienced increased fuel expenses but benefited more from higher fuel surcharge revenues, with fuel surcharges contributing $199 million in Q2 2010.