NS posts 10 percent profit increase, record operating ratio

Norfolk Southern Corp. reported third-quarter net income rose 10 percent to $506 million, or $1.75 per share, from $460 million, or $1.55 a share, in the same period a year ago.

NS' bottom-line growth was driven by an 11 percent increase in railway operations income, yielding a record quarterly operating ratio of 65.9 percent compared with 67.5 percent a year ago, company officials said in a press release.

Railway operating revenue of $2.7 billion was 6 percent higher on a year-over-year basis. Overall volumes climbed 4 percent in the quarter, reflecting growth within the Class I's major commodity categories of coal and intermodal, NS said.

Railway operating expenses in the quarter rose 3 percent to $1.8 billion compared with expenses in the same period last year, as targeted expense reductions and gains from the disposition of operating property helped offset volume and inflation-related expenses and higher incentive compensation, NS officials said.

The third-quarter results reflect the impact of the company's strategic plan, said Chairman, President and Chief Executive Officer James Squires.

"We are unwavering in our commitment to improve productivity as demonstrated by seven consecutive quarters of year-over-year improvement in our operating ratio," Squires said. "Our balanced approach focuses on increasing efficiency and delivering a strong customer service product, giving us the ability to achieve our goals and deliver sustainable shareholder value."

To learn more about NS' strategic plan, read Progressive Railroading's July cover story.