NS Reports 14% Operating Revenue Growth in 2022

Norfolk Southern on Wednesday reported that its railway operating revenue reached a record $12.7 billion in 2022, an increase of 14 percent, or $1.6 billion, compared with 2021.

The Atlanta-based company said these results were driven by an 18 percent increase in revenue per unit.

Railway operating expenses were $7.9 billion, an increase of 19 percent compared with the same period last year, driven by higher fuel prices, inflation, network congestion, and higher compensation and benefits.

Income from railway operations was $4.8 billion, up 8 percent, or $362 million year over year, an annual record. Diluted earnings per share were $13.88, up 15 percent, or $1.77, compared with 2021.

During the fourth quarter of 2022, railway operating revenue was $3.2 billion, a 13 percent increase, and railway operating income was $1.2 billion, a 5 percent increase compared with fourth-quarter 2021 financial results.

NS set fourth-quarter and annual records for railway operating revenue and income from railway operations.

Diluted earnings per share were $3.42, up 10 percent compared with the fourth quarter of 2021. Operating expenses in the quarter increased 19 percent to $2.1 billion compared with the same 2021 period due to higher fuel prices, increased claims costs and higher compensation and benefits, NS officials said.

However, during a conference call with investors NS executives said they expect a slowing economy and declining freight demand to produce flat revenue and earnings in 2023.

CEO Alan Shaw said service is the best it’s been in two years with NS having 7,500 active conductors and engineers, which is 100 below its goal for May. “We made great strides to close the year and are encouraged by our progress,” Shaw said.

Chief Marketing Officer Ed Elkins said during the conference call that he was optimistic NS would “claw back some volume.”

Still, he said there remains concern in the executive suite about slowing demand in intermodal and merchandise traffic.

NS executives said key operations metrics, including average train speed and terminal dwell time, continue to show improvement.

The Atlanta-based Class 1 carrier expects to continue hiring new operating workers and pledged to avoid furloughs of workers in order to make service more resilient.

NS plans to spend $2.1 billion on capital projects this year, including the modernization of 115 locomotives as part of its ongoing DC-to-AC traction conversion program.

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