Updates article with information from Norfolk Southern
Norfolk Southern (NYSE: NSC) has shed approximately 300 locomotives and intends to put up another 400 for sale, the Eastern U.S. railroad said in a Thursday filing to the Securities and Exchange Commission (SEC).
The company attributes its decision to the introduction of precision scheduled railroading [PSR] in 2019, which “continues to provide significant benefits to the network operations and has resulted in excess capacity,” which in turn sidelined these locomotives. PSR is an operating model that seeks to streamline operations.
Norfolk Southern (NS) told FreightWaves that the 300 locomotives were sold.
Because of these actions, NS will incur a noncash charge of $385 million for the first quarter of 2020. This charge will reduce first-quarter diluted earnings per share by $1.11, NS said.
The company will provide more details on this transaction, as well as an update on how the coronavirus pandemic has affected operations and its first-quarter results, according to the filing.
NS told the SEC earlier this month that it hadn’t taken into account the impact of the COVID-19 pandemic when it issued its earnings guidance for 2020.
NS will announce its first-quarter 2020 results on April 29.
mel perry
another pump & dump scheme, courtesy of the whores
of wall.street, boeing wasn’t enough
George Williams
Things are no different today than when Cornelius Vanderbilt declared, “The public be damned.”
All of the evils of present business models have their roots in the mindset of the 19th Century Robber Barons. The current attitude that Enron fostered has its ultimate roots there– most we forget that a great deal of today’s colon cancer is caused by charcoal, which Henry Ford invented to avoid losing money on the scrap wood left over from his manufacture of the wooden parts on his early automobiles. Running a smelting railroad fits right in.
Andrew
Ford didn’t invent charcoal. Any cancer risk is from cooking over fire. So wild and gas are just as risky. It was good business and good environmentalism to turn scrap wood into product.
Ian
How is SELLING assets a CHARGE to the balance sheet ?
Maybe I’m a bit thick, but shouldn’t they be receiving payment for the engines ?
PSR HATER
Just more of the smoke and mirrors B.S. that comes with PSR. Its a multi million dollar shell game. They all bought in to the B.S. from Hunter Harrison and his ilk. Rumor around the roundhouse is that his cause of death was blunt force trauma from patting himself on the back…
Ian
>> his cause of death was blunt force trauma from patting himself on the back…<< hilarious
Maaac
They are selling them below book value. They do receive cash, but it’s less than the amount they are valued at on their balance sheet.
Ian
thank you for the explanation, much clearer now
Paracelsus
Translation: NS is obeying the command of Wall Street, and public safety, customer service, employee well-being, system maintenance, and everything else is irrelevant. I’m sure the executives got a big bonus for this.
PSR HATER
Precision scheduled railroading is a disease to railroading. The only people that benefit from it are investors. They get rid of people, sell or scrap cars and locomotives, sell track, buildings and other real estate. They work what’s left of management and field employees to death, change and make up rules as they go. Take it from me, its just going to get worse…
Stephen Roberts
700 locomotives being culled this time? When traffic picks back up, NS will cry the blues over not having enough power to move trains. Doesn’t NS learn anything from past experiences of power shortages? It’ll be interesting to see what transpires long term with this and what the upper management says.
Stephen Roberts
EDIT: Not 700 total. Just reread the article. BUT regardless, combined with what NS has gotten rid of since 2019, they’ll wonder why service drops due to not having a surplus of road power.
Richard Eisfeller
I wonder how much of this excess of locomotives is simply due to a lower power to tonnage ratio and less business. A significant share is.
James Donohue
Mr. E, Are you still making that DVD set of railroad operations?
John
This people should be ashamed of how they treat there employees. All for the mighty dollar mean while family s lose everything they have!