Tuesday, July 24, 2012

With record ROI, NS shaves 2Q operating ratio

Written by  Luther S. Miller, Senior Consulting Editor

For this year's second quarter, Norfolk Southern earned a net income of $524 million that edged 6% below that for the second quarter of 2011, but it also had an impressive string of records to report Tuesday.

CEO Wick Moorman said that “income from operations, diluted earnings per share, and improved operating ratio all set records, despite the slow economic recovery and softness in our coal franchise.”

Diluted earnings per share were an all-time record $1.60, up 3%, beating Wall Street analyst estimates. Second-quarter 2011 net income included favorable, non-recurring income tax-related benefits totaling $63 million, or 18 cents per diluted share

Income from railway operations for the second quarter was $934 million, up 7% from the same period last year. The railway operating ratio improved 2 percentage points to an all-time record 67.5%.

“In the second quarter, Norfolk Southern continued to deliver outstanding results,” Moorman said. “Our railroad continues to operate extremely well, and that enables us to control costs and operate efficiently while providing high levels of service for our customers.”

He said operating revenue of $2.9 billion were essentially flat compared to 2011. General merchandise revenues improved 9% to $1.6 billion. Coal revenues declined 15% to $755 million. Intermodal revenue increased 4% to $563 million, with domestic intermodal volume rising 10%. Automotive volume and revenue rose 16% and 9%, respectively. Railway operating expenses fell 3% to $1.9 billion, compared with 2011.