Norfolk Southern's Q3 revenue, income fall on lower volume

Norfolk Southern Corp. reported third-quarter 2019 operating revenue fell nearly 4 percent to $2.8 billion, as a 2 percent increase in average revenue per unit was partially offset by a 6 percent decline in total volume, the Class I announced today.

Net income in the quarter dropped to $657 million, or $2.49 per share, compared with $702 million, or $2.52 per share, for the same period last year.

Operating expenses for the quarter also were down to $1.8 billion compared with $1.9 billion a year ago. Third-quarter rail operating income fell to $996 million from $1 billion last year.

The Class I logged an operating ratio of 64.9 percent — a third-quarter record —despite the impact of a write-off related to a legal dispute.

NS achieved its record Q3 operating ratio while rolling out the first phase of its new TOP21 operating plan, followed by the "swift transition to the plan's second phase," said NS Chairman, President and Chief Executive Officer James Squires in a press release.

"These efforts produced an 11 percent reduction in crew starts and recrews compared to the third-quarter last year, robustly outpacing the 6 percent volume decline while maintaining resilient service that supported an 11th consecutive quarter of year-over-year revenue per unit growth,” said Squires.

Initiatives focused on more efficient mechanical operations and the locomotive and rail-car fleet also progressed during the quarter.

"Looking ahead, additional productivity will be generated as we advance to the third phase of TOP21 and execute initiatives surrounding fuel efficiency, distributed power, intermodal operations, and our mechanical network," Squires said.