Norfolk Southern reports fourth-quarter and full-year 2019 results

Written by David C. Lester, Managing Editor
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Rail traffic: the pattern continues.
Norfolk Southern

Norfolk Southern Corporation today reported fourth-quarter and full-year 2019 financial results.

Net income was $666 million and diluted earnings per share were $2.55 for the fourth quarter and $2,722 million and $10.25, respectively, for the full year. During the first year of a three-year strategic plan, Norfolk Southern produced a record operating ratio of 64.7% while managing the headwinds of a 5% decline in carload volumes.

“Norfolk Southern’s strong financial performance in a year of macroeconomic headwinds is underpinned by the hard work of our team to expeditiously implement productivity initiatives throughout the year,” said James A. Squires, Norfolk Southern chairman, president and CEO. “With efficiency-related cost savings gaining steam in the third quarter and increasing in the fourth quarter, we achieved a record full-year operating ratio while also producing all-time best delivery performance for customers. This was the result of extensive systemwide planning integrated with customer communications during the first half of the year that created a foundation for the flawless execution of the initial two phases of our PSR-based operating plan, TOP21, in the second half. The momentum we’re carrying into 2020 will support continued value creation as we remain dedicated to the operational transformation of our business while ensuring we have a platform for growth as we look beyond the current freight cycle.”

Fourth-quarter summary

  • Railway operating revenues of $2.7 billion decreased 7 percent compared with fourth-quarter 2018, driven by a 9 percent decline in total volume.
  • Railway operating expenses were $1.7 billion, a decrease of $90 million compared with the same period last year. Lower compensation and benefits, fuel costs, equipment rents, and materials usage were partially offset by lower gains on operating property sales and increased purchased services expense.
  • Income from railway operations was $1.0 billion, a decrease of $116 million year-over-year. The railway operating ratio was 64.2 percent.

2019 summary

  • Railway operating revenues of $11.3 billion declined 1 percent as overall volumes were down 5 percent, reflecting carload declines in all major commodity categories.
  • Railway operating expenses of $7.3 billion decreased $192 million, or 3 percent, compared with last year. Lower compensation and benefits, fuel costs, equipment rents, and materials costs were partially offset by lower gains on operating property sales as well as increased purchased services and depreciation expense.
  • Income from railway operations was $4.0 billion, a 1 percent increase year-over-year, and an all-time record.
  • The railway operating ratio was a record 64.7 percent.

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