Summary
Norfolk Southern Corporation (NSC) reported its first-quarter 2015 financial results, showing a decline in net income to $310 million ($1.00 per diluted share) from $368 million ($1.17 per diluted share) in the prior year's first quarter. This decrease was primarily driven by a 9% drop in income from railway operations, largely attributable to a 5% decline in railway operating revenues. Key factors impacting revenues included lower average revenue per unit, particularly due to reduced fuel surcharge revenue, and a decrease in coal volumes. These headwinds were partially offset by lower operating expenses, a significant portion of which was due to a substantial decrease in fuel costs resulting from lower oil prices. The company generated $605 million in cash from operating activities. Despite the decline in profitability, NSC demonstrated a strong commitment to returning capital to shareholders, repurchasing $415 million of its common stock during the quarter, significantly more than the $50 million repurchased in the prior year's first quarter. The company's financial condition remained solid, with total debt-to-total capitalization at 42.3%. Management is focused on improving network fluidity, expecting key operational metrics to approach 2012-2013 performance levels in the latter half of the year.
Financial Highlights
46 data points| Revenue | $2.57B |
| Operating Expenses | $1.96B |
| Operating Income | $606.00M |
| Interest Expense | $132.00M |
| Net Income | $310.00M |
| EPS (Basic) | $1.01 |
| EPS (Diluted) | $1.00 |
| Shares Outstanding (Basic) | 306.80M |
| Shares Outstanding (Diluted) | 309.60M |
Key Highlights
- 1Net income decreased by 16% year-over-year to $310 million ($1.00 per diluted share) from $368 million ($1.17 per diluted share).
- 2Railway operating revenues declined by 5% to $2.567 billion, primarily due to lower average revenue per unit (impacted by reduced fuel surcharges) and decreased coal volumes.
- 3Railway operating expenses decreased by 3% to $1.961 billion, significantly aided by a 39% reduction in fuel expenses due to lower oil prices.
- 4Operating ratio increased to 76.4% from 75.2% in the prior year's first quarter, indicating higher operating expenses relative to revenues.
- 5Cash provided by operating activities was $605 million, an increase from $588 million in the prior year.
- 6Significant increase in share repurchases, totaling $415 million in the first quarter of 2015, compared to $50 million in the same period of 2014.
- 7Total assets decreased to $32.775 billion from $33.241 billion at year-end 2014, primarily due to lower cash and cash equivalents resulting from share repurchase activity.