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Rail News: Norfolk Southern Railway

Financial statement: NS capped off record-setting 2014 with strong fourth quarter

Relatively solid performance in the fourth quarter helped Norfolk Southern Corp. set five annual financial records in 2014.

Fourth-quarter revenue and net income were flat at $2.9 billion and $511 million, respectively, but income from railway operations increased 1 percent to a Q4 record $891 million, volume increased 4 percent to 1.93 million units, railway operating expenses declined 1 percent to $2 billion and the operating ratio improved 0.4 points to 69 compared with fourth-quarter 2013 results.

General merchandise volume rose 5 percent to 646,800 units and revenue increased 3 percent to $1.7 billion. Within the sector, chemicals and metals/construction revenue grew 11 percent and 5 percent, respectively, and automotive revenue was flat, while paper/forest products revenue dipped 3 percent and agricultural products revenue declined 2 percent.

Meanwhile, intermodal volume climbed 6 percent to 979,300 units and revenue rose 5 percent to $649 million. Coal volume slipped 6 percent to 302,100 units and revenue tumbled 15 percent to $543 million due to weak shipments in both the utility and export coal markets.

For the full year, NS set the following five financial records: railway operating revenue at $11.6 billion (up 3 percent versus 2013); income from railway operations at $3.6 billion (up 10 percent); net income at $2 billion (up 8 percent); diluted earnings per share at $6.39 (up 9 percent); and operating ratio at 69.2 (a 1.8-point improvement). Volume rose 4 percent to 7.67 million units and railway operating expenses inched up 1 percent to $8 billion.

"Norfolk Southern delivered another solid quarter of financial performance, capping a record-setting year," said NS Chairman and Chief Executive Officer Wick Moorman in a press release.

The Class I also announced its projected capital spending for 2015 will total about $2.4 billion compared with $2.1 billion in 2014 and $1.97 billion in 2013. The 2015 budget includes $927 million for roadway maintenance and projects, $404 million for freight cars, $238 million for locomotives, $238 million for facilities and terminals, $220 for positive train control implementation, $199 million for various other projects, $104 million for infrastructure and $65 million for technologies.

The capital expenditures will help the railroad maintain safety and rail network quality, enhance service, improve operational efficiency and support growth opportunities, said Moorman.

Contact Progressive Railroading editorial staff.

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