Subscribe to our free, weekly email newsletter!


Norfolk Southern posts strong 3Q 2010 earnings

By Jeff Berman, Group News Editor
October 28, 2010

As has been the case during third quarter earnings, Class I railroad earnings continued to deliver strong results, with Norfolk Southern’s strong earnings results bearing that out.

Earnings for the Norfolk, Virginia-based carrier at $445 million were up 47 percent year-over-year. And earnings per share of $1.19 were also up 47 percent, beating Wall Street estimates of $1.09.

Quarterly revenue of $2.5 billion was up 19 percent, benefitting from a 15 percent annual volume increase (and 2 percent from the second quarter), the fifth straight quarter of volume growth. And income from railway operations was up 33 percent to $476 million. Norfolk Southern’s operating ratio improved 3.2 percent to 69.6 percent.

On an earnings conference call, NS CEO Wick Moorman recalled how in the second quarter of this year he was optimistic that the momentum NS generated in the first half of the year would continue into the third quarter.

“I am pleased to report momentum has remained strong as NS has delivered double-digit increases in revenue, income, and bottom-line results,” said Moorman. “Against this [difficult] economic backdrop, we continue to improve productivity as we safely handle increasing traffic levels. While experiencing significant traffic volume swings over the last two years, our systems continue to provide us with increased flexibility and service consistency with respect to our operating plans.”

Looking at volumes for specific industry verticals, coal loadings at 402,700 were up 12.8 percent. General merchandise at 587,700 carloadings was up 9.7 percent, and intermodal at 1, 752,600 was up 13.3 percent.

Intermodal continues to be a major sweet spot for Class I railroads, and Norfolk Southern is no exception in that regard. In the third quarter, it officially rolled out Heartland Corridor, which Moorman said represents the shortest, most direct, double-stacked intermodal route, linking the Port of Hampton to the Midwest.

Absent from the earnings call was any commentary on pricing for the third quarter.

A research note from Tony Hatch, principal of New York-based ABH Consulting stated that NS had 60 percent of 2011 contracts locked in that their target levels of “rail inflation plus,” which he said equates to 3-to-4 percent price increases.

About the Author

Jeff Berman headshot
Jeff Berman
Group News Editor

Jeff Berman is Group News Editor for Logistics Management, Modern Materials Handling, and Supply Chain Management Review. Jeff works and lives in Cape Elizabeth, Maine, where he covers all aspects of the supply chain, logistics, freight transportation, and materials handling sectors on a daily basis. .(JavaScript must be enabled to view this email address).


Subscribe to Logistics Management magazine

Subscribe today. It's FREE!
Get timely insider information that you can use to better manage your
entire logistics operation.
Start your FREE subscription today!

Recent Entries

Putting the renewed strength in the truckload market into a very positive perspective is a report issued by Avondale Partners analyst Donald Broughton, which was released yesterday. Entitled, “Q2’15 Trucking Capacity; Goldilocks Era Continues,” Broughton explained that in the second quarter only 70 truckload fleets failed, or exited the business. That number may seem high to some, but it is not, especially when you consider that the second quarter of 2014 saw more than five times as many truckload carriers, 375 to be exact, exit the business.

Global demand remains stable as packaging equipment providers of all sizes shift focus

Six straight days without a ship waiting for berth

Freight forwarders were relieved to learn yesterday that U.S. Customs and Border Protection (CBP) would be delaying its Automated Commercial Environment (ACE) implementation.

The Institute for Supply Management’s (ISM) August edition of the Manufacturing Report on Business saw its PMI, the ISM’s index to measure growth, fall 1.6 percent to 51.1, following a 0.8 percent decline to 52.7 in July. Even with the relatively slow growth over the last two months, the PI has been at 50 or higher for 31 consecutive months.

Comments

Post a comment
Commenting is not available in this channel entry.


© Copyright 2015 Peerless Media LLC, a division of EH Publishing, Inc • 111 Speen Street, Ste 200, Framingham, MA 01701 USA