NS Sets 4th Quarter Record for Operations Income

Norfolk Southern said on Wednesday that during the fourth quarter of 2021 it earned net income of $760 million, an increase of 13 percent over the same period in 2020 when it earned $671 million.

Diluted earnings per share were $3.12 compared with $2.64 in the fourth quarter of 2020.

The operating ratio, the percentage of revenue devoted to operating expenses, was a record 60.4 percent compared with 61.8 percent in the same quarter of 2020.

NS said its railway operating expenses during the quarter were $1.7 billion, an increase of 8 percent, or $134 million, compared with the 2020 period, due to higher fuel and purchased services expenses.

Railway operations income totaled a fourth-quarter record $1.1 billion, an increase of 15 percent or $145 million on a year-over- year comparison.

Traffic volume during the fourth quarter fell 4 percent compared to the same period in 2020. Merchandise volume was up 2 percent and coal volume rose 4 percent, but intermodal volume dropped 7 percent;

In a news release, NS said quarterly railway operating revenue in 2021 as a whole was $11.1 billion, an increase of 14 percent or $1.35 billion over 2020.

Railway operating expenses were $6.7 billion, a decline of 1 percent, or $92 million, compared with 2020.

“Last year’s results included a $385 million non-cash locomotive rationalization charge and a $99 million non-cash impairment charge related to an equity-method investment,” NS reported. “Excluding those charges, operating expenses were up 6 percent, or $392 million, compared with adjusted operating expenses in 2020, driven by higher fuel, purchased services and compensation and benefit expenses.”

Income from railway operations was a record $4.45 billion, up 48 percent or $1.45 billion.

“Excluding the effects of the locomotive rationalization and impairment charges in 2020, income from railway operations was up 28 percent, or $961 million, on a year-over-year adjusted basis,” NS said.

The 2021 operating ratio was a record 60.1 percent, an improvement of 920 basis points over 2020.

“Excluding the effects of the locomotive rationalization and impairment charges in 2020, the operating ratio improved 430 basis points over the adjusted results for 2020,” NS said.

For 2022, NS projects “upper single-digit year-over-year growth” in revenue, with merchandise and intermodal leading volume growth. Coal is expected to continue to decline.

The railroad is eyeing a decline of 50 to 100 basis point in its operating ratio,and plans capital expenditures of $1.8 billion to $1.9 billion.

For more information visit the NS investor relations page at http://www.nscorp.com/content/nscorp/en/investor-relations/presentations/fourth-quarter-2021-earnings.html

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