The Class I railway’s net income rose 12 percent year-over-year in the first quarter of 2017 to $433 million, despite inflation and higher fuel costs.
Norfolk Southern Corp. posted a net income of $433 million for the first quarter of 2017, up 12 percent year-over-year, the Class I railway said Wednesday.
The company attributed the upward trend to a 7 percent rise in income from railway operations and a lower effective income tax rate.
Railway operating revenues of $2.6 billion increased 6 percent from the first quarter of 2016, as overall volumes ticked up 5 percent, resulting from growth in coal, intermodal and merchandise commodities.
Railway operating expenses for the quarter increased 6 percent year-over-year to $1.8 billion, as targeted expense reductions and efficiencies were offset by inflation, particularly within fuel expenses, which were higher by $64 million. However, income from railway operations set a first quarter record of $773 million, up 7 percent year-over-year.
“Norfolk Southern’s record results for the first quarter demonstrate the efficacy of our strategic plan, under which we are enhancing our service quality and network performance while driving significant efficiency improvements,” said James A. Squires, Norfolk Southern chairman, president and chief executive officer. “Our focus on providing a superior service product has positioned us for growth and, coupled with our cost discipline, has contributed to a solid start to the year. Our strategy provides a strong foundation for growth at low incremental costs, a powerful formula for enhanced shareholder value.”
Norfolk Southern declared a regular quarterly dividend of 61 cents per share on its common stock, payable on Jun 10 to stockholders of record on May 5.
Meanwhile, Norfolk Southern Executive Vice President and Chief Financial Officer Marta Stewart said she will retire Aug 1.
The railway said it has initiated a comprehensive search to identify its next chief financial officer, and will consider both internal and external candidates with the assistance of an executive search firm.
Stewart first joined Norfolk Southern as an accountant in 1983, and has served as vice president accounting and controller, and vice president finance and treasurer. She became executive vice president and chief financial officer of Norfolk Southern in 2013.
“Marta has made significant contributions to NS over the course of her career, most recently as one of the architects of our strategic plan,” Squires said. “Her intimate knowledge of the railroad business, engagement with stakeholders inside and outside the company, and relentless focus on driving shareholder value has positioned NS for continued success. On behalf of the board and management team, I thank Marta for her service and wish her the best in retirement. We look forward to Marta’s continued leadership as we conduct our CFO search and execute an orderly transition to her successor.”
Norfolk Southern increases Q1 net income
