Norfolk Southern posts strong 3Q 2010 earnings

By Jeff Berman, Group News Editor
October 28, 2010 - LM Editorial

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

Lyon, France-based Norbert Dentressangle, a $5.5 billion global third-party logistics (3PL) services provider focused on global logistics, transport, ocean, and air services, said today it has acquired Des Moines, Iowa-based Jacobson Companies, a value-added warehousing (VAW) company, for $750 million from private equity firm Oak Hill Capital Partners.

Download the newly released research report, "Transportation Management Systems" conducted by Peerless Research Group (PRG) on behalf of Supply Chain Management Review and Logistics Management magazines. Learn what logistic experts are saying about their current supply chain technology infrastructures, how they tackle the transportation component, and revealed the gaps that still need to be filled in order to attain end to-end visibility of a streamlined supply chain.

From cost center to growth center. Get insightful opinions on changes in the marketplace from this independent survey of warehouse personnel. Motorola Solutions examined the current warehousing marketplace in our 2013 Warehouse Vision Report, conducted April-May of 2013.

Even though not all publicly-traded less-than-truckload carriers (LTL) have posted second quarter earnings yet, the early consensus for those that have issued results is looking very good.

The advance estimate for second quarter GDP at 4.0 percent could serve as a sign of a steadier and improving economy.

About the Author

Jeff Berman, 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. Contact Jeff Berman.

Comments

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


© Copyright 2013 Peerless Media LLC, a division of EH Publishing, Inc • 111 Speen Street, Ste 200, Framingham, MA 01701 USA