Norfolk Southern Reports Decline in Q4 Earnings

Norfolk Southern

[Stay on top of transportation news: Get TTNews in your inbox.]

Norfolk Southern Corp. saw its fourth-quarter revenue fall by 4% as freight volume fell in most of the commodities it moves.

The Class I railroad reported fourth-quarter net income of $671 million, or $2.64 a share, compared with $666 million ($2.55) in the same period a year ago.

Revenue was $2.57 billion, compared with $2.69 billion a year ago.

Squires

Full-year net income fell to $2.01 billion ($7.84) from $2.72 billion ($10.25) a year ago. Revenue fell 13% to $9.8 billion from $11.3 billion in 2019.

“During a year of unprecedented market disruption and uncertainty, the Norfolk Southern team delivered record productivity levels while providing safe and reliable freight solutions for our customers,” CEO James Squires said in a statement. “As we take stock of what we achieved in 2020 while managing both the pandemic and energy market challenges, including the successful idling of four additional hump operations while driving productivity to record levels, we see much more opportunity ahead. We have set the stage to drive further efficiency and profitable growth in 2021 through our precision scheduled railroading operating plan, which will deliver long-term value for both our shareholders and customers.”

Norfolk Southern is one of several Class I railroads that have aggressively moved to become more efficient by utilizing precision scheduled railroading, which involves moving freight with fewer railcars and locomotives using a more simplified, direct line of transport across the network. It also means longer, heavier trains operated with fewer employees.

“During a year of unprecedented market disruption and uncertainty, the Norfolk Southern team delivered record productivity levels while providing safe and reliable freight solutions for our customers,” Jim Squires, Chairman, President and CEO https://t.co/xmt57KbCRD — Norfolk Southern (@nscorp) January 27, 2021

The railroad’s operating ratio improved to 61.8 from 64.2 in the fourth quarter of 2019.

The operating ratio (expenses as a percentage of revenue) is used to measure efficiency. The lower the ratio, the higher the company’s ability to generate profit.

Norfolk Southern operated with fewer employees, finishing the year with 14.6% fewer people or 19,192 employees, compared with 22,478 in 2019.

Across the railroad’s commodity sectors, Norfolk Southern reported:

• Agriculture, forest and consumer products declined 1% to $546 million, compared with $549 million in 2019.
• Chemical shipments dropped 13% to $438 million from $506 million.
• Coal slumped 20% to $290 million from $363 million.
• Automotive revenue declined by 5% to $233 million from $245 million.
• Intermodal shipment revenue increased 5% to $730 million from $697 million a year ago.
• Metals and construction-related materials also notched 2% upward to $336 million from $330 million in 2019.

Want more news? Listen to today's daily briefing: