Summary
Norfolk Southern Corporation (NSC) reported solid financial results for the second quarter and first six months of 2019, demonstrating growth in key profitability metrics. Railway operating revenues saw a modest increase, primarily driven by higher average revenue per unit across most commodity groups, reflecting successful pricing strategies. Despite a slight decrease in overall traffic volumes, particularly in Merchandise and Coal, the company achieved record low operating ratios and significant year-over-year increases in income from railway operations and net income. The company's strategic plan implementation is showing positive traction, as evidenced by improved operational efficiency. Expenses were managed effectively, with decreases in fuel costs and benefits from increased network velocity, although depreciation and casualties/claims saw increases. Share repurchases continued to be a significant focus, contributing to a stronger diluted earnings per share growth exceeding net income growth. NSC maintains a strong liquidity position, with ample cash flow from operations to meet its obligations and a stable debt-to-capitalization ratio.
Financial Highlights
45 data points| Revenue | $2.92B |
| Operating Expenses | $1.86B |
| Operating Income | $1.06B |
| Interest Expense | $153.00M |
| Net Income | $722.00M |
| EPS (Basic) | $2.72 |
| EPS (Diluted) | $2.70 |
| Shares Outstanding (Basic) | 264.80M |
| Shares Outstanding (Diluted) | 267.10M |
Key Highlights
- 1Second quarter diluted earnings per share (EPS) increased by 8% to $2.70, and first six months diluted EPS rose 18% to $5.21 compared to the prior year.
- 2Income from railway operations increased by 4% for the second quarter and 9% for the first six months, driven by higher average revenue per unit.
- 3Record low second-quarter operating ratio of 63.6%, indicating improved operational efficiency.
- 4Railway operating revenues grew 1% in Q2 to $2.925 billion and 3% in the first six months to $5.765 billion, primarily due to pricing gains.
- 5Significant share repurchases totaling $1.1 billion in the first six months of 2019, compared to $700 million in the same period of 2018, boosting EPS growth.
- 6Railway operating expenses decreased by 1% for both the second quarter and the first six months, aided by lower fuel costs and improved network velocity.