The Class I railway’s net income rose 2 percent year-over-year in the third quarter of 2016 to $460 million, despite a weak coal segment.
Norfolk Southern Corporation posted a net income of $460 million for the third quarter of 2016, up 2 percent from the third quarter of 2015, the Class I railway said Wednesday.
Diluted earnings per share (EPS) for the quarter rose to $1.55 per diluted share from $1.49 per diluted share a year prior.
However, Norfolk Southern’s operating revenues for the quarter declined 7 percent year-over-year to $2.5 billion due to reduced volumes and lower fuel surcharge revenues.
General merchandise revenues for the quarter fell 4 percent year-over-year to $1.6 billion, largely due to the chemicals commodity group, which saw revenues tumble 10 percent year-over-year to $408 million. Intermodal revenues for the quarter fell 7 percent year-over-year to $575 million, while coal revenues tumbled 18 percent year-over-year to $397 million. Coal volumes declined 15 percent from the third quarter of 2015 due to above-normal stockpiles and low natural gas prices.
Norfolk Southern’s overall volumes dropped 4 percent from the third quarter of 2015 to 1.9 million units for the quarter.
“Our continued focus on efficiency and asset utilization, balanced with our commitment to customer service, drove an operating ratio of 67.5 percent for the quarter and a record 68.7 percent for the first nine months, setting us well on the way to achieving productivity savings of about $250 million and an operating ratio below 70 percent for the year – even in the face of economic headwinds,” Norfolk Southern Chairman, President and CEO James A. Squires said.
Norfolk Southern declared a dividend of $0.59 cents per share on its common stock, payable Dec. 10 to stockholders of record on Nov. 4.
Although Norfolk Southern posted an increase in net income for the quarter, various other Class I railways reported declines for the quarter. Union Pacific posted a net income of $1.1 billion for the quarter, while CSX reported net earnings of $455 million, year-over-year declines of 13 percent and 10 percent, respectively. Canadian National reported a net income of C$972 million (U.S. $727.6 million), down 2.9 percent from the third quarter of 2015. In addition, Kansas City Southern saw net earnings fall 9.1 percent year-over-year to $121 million.
However, Canadian Pacific’s net earnings for the quarter grew 7.4 percent year-over-year to $347 million Canadian (U.S. $266.4 million).
Norfolk Southern increases net income in Q3
