Summary
Norfolk Southern Corporation (NSC) reported its third quarter and first nine months results for 2019, indicating a mixed performance. For the third quarter, the company saw a decrease in railway operating revenues, primarily due to lower volumes across most commodity groups, although pricing gains helped offset some of this decline. Net income and diluted earnings per share also saw a slight decrease year-over-year for the quarter. However, for the first nine months of 2019, railway operating revenues saw a modest increase, driven by pricing, and income from railway operations and net income showed growth. The company highlighted a record low third-quarter operating ratio of 64.9%, attributed to their new strategic plan focused on network efficiency. Despite revenue pressures, NSC managed operating expenses effectively, particularly in compensation and benefits and fuel, contributing to the improved operating ratio. Significant strategic initiatives include ongoing share repurchases and capital investments in property, indicating a focus on returning value to shareholders and maintaining operational infrastructure.
Financial Highlights
46 data points| Revenue | $2.84B |
| Operating Expenses | $1.84B |
| Operating Income | $996.00M |
| Interest Expense | $150.00M |
| Net Income | $657.00M |
| EPS (Basic) | $2.50 |
| EPS (Diluted) | $2.49 |
| Shares Outstanding (Basic) | 262.10M |
| Shares Outstanding (Diluted) | 264.30M |
Key Highlights
- 1For Q3 2019, Railway Operating Revenues decreased by 4% to $2.84 billion, primarily due to a 6% decline in volumes, partially offset by a 2% increase in average revenue per unit.
- 2Net income for Q3 2019 was $657 million, a decrease of 6% from $702 million in Q3 2018. Diluted EPS was $2.49, down 1% from $2.52.
- 3For the first nine months of 2019, Net Income increased by 5% to $2.06 billion from $1.96 billion in the prior year, with Diluted EPS up 11% to $7.70 from $6.95.
- 4The company achieved a record low third-quarter operating ratio of 64.9%, an improvement from 65.4% in Q3 2018, reflecting successful implementation of their new strategic plan.
- 5Operating expenses decreased by 4% in Q3 2019, mainly driven by lower compensation and benefits (down 6%) and fuel costs (down 18%).
- 6Coal revenues saw a significant decrease of 14% in Q3 2019 and 8% for the first nine months, largely due to declining utility demand and export volumes.
- 7Norfolk Southern repurchased $1.6 billion of common stock in the first nine months of 2019, down from $2.3 billion in the same period of 2018, as part of its ongoing share repurchase program.