Norfolk Southern: Q2 revenue down 29 percent on lower volume

Norfolk Southern Railway today reported 2020 second-quarter railway operating revenue fell 29 percent to $2.1 billion driven by a 26 percent decline in total freight volume compared with second-quarter 2019 results.

NS posted Q2 net income of $392 million, down 46 percent, and diluted earnings per share of $1.53, down 43 percent from a year ago.

Like other Class Is that have reported Q2 financial results in recent days, NS officials cited the COVID-19 pandemic's impact on volume as a major factor in the company's performance during the quarter. 

At the same time, NS continued to make progress on implementing its new operating model, executives said in a press release. NS reported Q2 railway operating expenses of $1.5 billion, down 21 percent from a year ago. The decrease was driven by lower fuel, compensation, benefits and purchased services expenses, NS officials said in a press release.

"Underscoring our commitment to shareholder value, we forged ahead with our ongoing transformation by further reducing our hump-yard footprint, achieving fuel efficiency gains and increasing train size," said Chairman, President and Chief Executive Officer James Squires. "These are astounding achievements while managing the unprecedented economic disruption and public health crisis." 

Income from railway operations was $610 million, down 43 percent. The railroad's operating ratio for the quarter was 70.7 percent compared to 63.6 percent a year ago.

"We are mobilized and driven to meet the challenges and opportunities that lie ahead, and we will continue to create collaborative change and relentlessly pursue increased productivity as a leading supply chain partner throughout the economic recovery and beyond," Squires said.