Count Norfolk Southern Corp. as the third Class I to post a second-quarter operating ratio below 70. Yesterday, NS reported that its ratio improved 5 points year over year to a record 69.8. CN and Union Pacific Railroad previously reported 2Q operating ratios under 70.
NS also reported that second-quarter diluted earnings per share soared 58 percent to $1.04, net income jumped 59 percent to $392 million, income from railway operations rose 57 percent to $733 million, volume increased 22 percent to 1.7 million units and railway operating revenue went up 31 percent to $2.4 billion compared with second-quarter 2009 figures. Analysts polled by Thomson Reuters had expected earnings of 99 cents per share and revenue of $2.4 billion.
“Second-quarter volumes improved not only 22 percent year over year, but also 9 percent sequentially from the first quarter and represented the fourth consecutive quarter of sequential volume improvement. We also posted 52-week highs in several commodity groups,” said NS Chairman, President and Chief Executive Officer Wick Moorman during the Class I’s earnings webcast and teleconference yesterday. “Operationally, we continue to make significant strides in productivity. Against a 22 percent volume increase, crew starts were up only 10 percent, locomotive fuel consumption, only 18 percent, and equipment rents, only 8 percent.”
General merchandise volume rose 27 percent to 592, 070 units and revenue jumped 31 percent to $1.3 billion; coal volume increased 19 percent to 394, 415 units and revenue ballooned 36 percent to $696 million; and intermodal volume rose 20 percent to 733,324 units and revenue soared 24 percent to $451 million.
However, second-quarter railway operating expenses increased 22 percent to $1.7 billion primarily because compensation/benefit costs increased by $119 million and fuel costs went up by $105 million.
“Looking ahead, while we share the common concerns about the ongoing strength of the recovery, our traffic levels remain strong on a comparative and sequential basis,” said Moorman. “We see continuing positives in almost all of the major components of our traffic base based on both a continuing economic recovery and project-related growth.”
Source: Progressive Railroading Daily News
