NS Sets Quarterly Income Records

Norfolk Southern on Wednesday reported setting records in operating revenue and income from railway operations in the second quarter of this year.

The carrier said operating revenue was $3.3 billion, an increase of 16 percent compared with the same period in 2021. That was a quarterly record.

The increase from the same quarter of a year earlier was due to a 20 percent increase in revenue per unit.

Income from railway operations was $1.3 billion, up 9 percent compared with the second quarter of 2021. That was a record for a single quarter, NS officials said in a news release.

Net income for the quarter was $819 million, about the same as a year ago, and diluted earnings per share of $3.45 were a 5 percent increase.

Railway operating expenses rose 21 percent to $2 billion. NS attributed that to higher fuel prices, lower property sales and increased costs from inflation and service issues

The operating ratio in the second quarter was 60.9 percent compared to 58.3 percent a year ago.

In a statement, NS CEO Alan Shaw said the Atlanta-based carrier had seen improvements in service.

“In the second quarter we stabilized service levels, expanded our pipeline of conductor trainees, and launched the next evolution of our operating plan, TOP | SPG, with our signature no surprises approach,” Shaw said during an earnings call. “Service is not yet where we want it to be, but I am encouraged by our progress.”

Freight volume during the second quarter was down 3 percent. Merchandise traffic fell 1 percent, while intermodal and coal were each down 4 percent.

Compared to the first quarter of 2022, though, average train speed and terminal dwell times were worse

NS Chief Operating Officer Cindy Sanborn tried to put a positive spin on that by saying “we are really encouraged by the improvements we are seeing here in July.”

She said so far in July, train speeds are up 6 percent and dwell times are down 3 percent.

Officials said crew shortages limited the number of trains NS could operate and those that ran were longer, heavier and more fuel efficient.

Sanborn said NS has been able to add new conductors at a rate that exceeds the attrition of existing workers.

NS now has 7,190 qualified train and engine workers, an increase of 224 over the second quarter average. There were 988 conductors in training during the second quarter.

Management expects 12 percent or better revenue growth for the year and projects that the operating ratio will increase a half point to one point.

Tags: Alan Shaw, Cindy Sanborn, Norfolk Southern, NS finances, NS financial figures, NS financial outlook, NS financial results, NS quarterly financial results, quarterly finacial reports