Fueled by a 15 percent increase in income from railway operations and a record operating ratio, Class I railway Norfolk Southern’s earnings during the quarter shot up 23 percent to $497 million, according to the company’s most recent financial statements.
Class I railway Norfolk Southern Corp. recorded a net income of $497 million for the second quarter of 2017, a 23 percent boost from the corresponding 2016 period, driven by a 15 percent increase in income from railway operations to $888 million and a record operating ratio, according to the company.
Norfolk Southern’s operating ratio totaled 66.3 percent for the quarter, a 2.3 percentage point improvement from an operating ratio of 68.6 percent for last year’s second quarter.
Diluted earnings per share, which zoomed past the Zacks Consensus Estimate of $1.64 per share, stood at $1.71 per share for the quarter, a dramatic increase from $1.36 per share for the second quarter of 2016.
Norfolk Southern also increased railway operating revenues during the quarter by 7 percent year-over-year to $2.6 billion, as the company’s overall volumes rose by 6 percent year-over-year, reflecting growth within its coal and intermodal commodity categories.
Compared to the second quarter of 2016, merchandise revenues ticked up 1 percent to $1.6 billion, intermodal revenues increased 10 percent to $593 million and coal revenues soared 32 percent to $447 million.
Last Tuesday, Norfolk Southern revealed it would be consolidating its Central Division headquarters in Knoxville, Tenn. on or around Nov. 1.
The move will reduce the number of operating divisions on the company’s system from 10 to nine.
Dispatching responsibilities currently handled from the Central Division, which primarily includes track in Tennessee and Kentucky, will be divided between operating divisions headquartered in Birmingham, Ala.; Decatur, Ill.; and Fort Wayne, Ind.
The move will affect about 50 employees at the Central Division headquarters in management, dispatching and clerical positions.
Dispatchers will have the opportunity to transfer to one of the other three divisions or apply for vacancies across the system, while administrative and clerical employees will be given opportunities to apply for vacant positions elsewhere, Norfolk Southern said.
Current yard and field operations on the Central Division will not be affected by the headquarters closure, but will be reassigned between the other three divisions.
Over 250 employees will remain in Knoxville to provide service to local customers and support the yard’s role as a hub for through-train operations.
Based out of Norfolk, Va., Norfolk Southern operates about 19,500 route miles across 22 states and the District of Columbia.
NS net income surges 23% in Q2 2017
