Norfolk Southern officials said the railroad broke a record for net income during the third quarter, generating $562 million, a 21-percent, year-over-year rise.
Income from railway operations experienced a 22-percent increase to $1 billion.
Coupled with those record earnings, NS’ operating ratio improved by 5 percentage points, as operating revenues rose 9 percent to $3 billion, which officials said is another record result. On the strength of the results, NS’ board of Directors Tuesday voted to increase the railroad’s quarterly divided by 6 percent.
Intermodal revenues rose by 11 percent, year-over-year to $650 million, and coal revenues increased by 7 percent to $672 million
Coal volumes were up by 3 percent on “increased demand for utility coal from stockpile replenishment in response to a severe winter and higher natural gas prices, which offset lower export volume,” according to press release. Overall volumes increased 7 percent on better numbers from agriculture, chemical and metal shipments.
“Norfolk Southern delivered excellent financial performance during the second quarter, reporting the highest railway operating revenues in its history,” the railroad’s chief executive officer, Wick Moorman, said in a statement. “We see continued strength across most of our business segments and are optimistic that overall economic conditions will drive growth. Our focus remains unchanged. We are committed to running the safest railroad, providing superior service, increasing efficiency, and driving superior returns to our shareholders.”
Norfolk Southern’s results are in line with those measured by the Association of American Railroads. The group saw strong quarterly gains for both carload and intermodal volumes. In June, carload and intermodal traffic volumes rose 3.6 percent and 6.7 percent, respectively, year-over-year. This solid end to the quarter followed growth 6.1-percent carload growth and 8-percent intermodal growth in May, and increases of 6.4 percent in carload and 9 percent in intermodal in April.
In Canada, Canadian National reported Monday it experienced a 17-percent, year-over-year, increase in revenues, while revenue ton miles grew by 14 percent. Net income for the quarter stood at CAN $847 million ($788.5 million), CAN $130 million more than the same period in 2013.
The railroad’s CAN $3.12 billion in second-quarter revenues were fueled by a 35-percent rise in grain volumes and a 20-percent increase in metals and minerals shipments. Intermodal activity rose by 17 percent.
“CN delivered record volumes in the quarter by bringing its key supply chains back into sync and taking advantage of continued strength in several of our core markets,” CN’s president and chief executive officer, Claude Mongeau, said in a statement. “This solid operational recovery underscores our ability to accommodate growth at low incremental cost and to drive very strong financial results.”
Last week, Canadian Pacific reported CAN $1.68 billion in second-quarter revenues, an increase of 12 percent, and operating income of CAN $587 million, a rise of 40 percent. Net income increased during the quarter by CAN $119 million. Net income for the year stood at CAN $625 million, compared to CAN $469 million from the previous year.
“CP delivered another record quarter,” E. Hunter Harrison, CP’s CEO, said at the time. “The team has made great strides in my two years at CP and they continue to demonstrate resiliency by delivering these results despite continued operational challenges in the U.S. Midwest after a devastating winter. The future is very promising for the railroad as we transition toward leveraging our lower cost structure and improved service.”
Railroads reap second-quarter profits
