Latest news with #NorfolkSouthernCorp
Yahoo
24-04-2025
- Business
- Yahoo
Norfolk Southern Corp (NSC) Q1 2025 Earnings Call Highlights: Navigating Storms and Achieving Growth
EPS Growth: 8% growth on an adjusted basis. Storm Restoration Costs: $35 million incurred due to weather impacts. Labor Productivity Savings: $55 million in savings. Volume Increase: Overall volume rose 1% year-over-year. Total Revenue: Flat, with total revenue less fuel up 2%. Merchandise RPU Less Fuel: Increased by 4% year-over-year. Intermodal Volume Increase: 3% year-over-year increase. Coal RPU Less Fuel: Decreased by 3% due to lower export coal prices. Operating Ratio: Adjusted operating ratio was 67.9%, including 120 basis points from storm costs. Net Income and EPS Improvement: 8% improvement year-over-year. Share Repurchases: Nearly $250 million of shares bought back in the quarter. Insurance Recoveries: Net benefit of $185 million from insurance recoveries related to the Eastern Ohio incident. Warning! GuruFocus has detected 4 Warning Sign with NSC. Release Date: April 23, 2025 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Norfolk Southern Corp (NYSE:NSC) achieved an 8% EPS growth on an adjusted basis despite severe weather disruptions. The company demonstrated strong network resiliency, quickly restoring operations after 18 significant storms. Labor productivity improvements resulted in $55 million in savings, contributing to financial performance. The company achieved a 3% year-over-year volume increase in Intermodal, with gains in both domestic and international segments. Norfolk Southern Corp (NYSE:NSC) maintained a strong focus on safety, achieving a 13% year-over-year reduction in FRA injury ratio and a 43% reduction in train accident frequency. Norfolk Southern Corp (NYSE:NSC) faced $35 million in extraordinary expenses due to storm restoration, impacting the operating ratio. Export coal prices were lower, negatively affecting revenue per unit (RPU) less fuel by 3%. The company experienced flat total revenue, with fuel surcharge headwinds masking otherwise solid revenue performance. There is uncertainty regarding the impact of tariffs on end markets and revenues, which could affect future performance. The company is facing challenges in the Metals and Construction segments, with volume declines offsetting gains in other areas. Q: Can you discuss the operating ratio and the impact of winter storm costs on your targets? A: Jason Zampi, CFO, explained that despite the harsh winter weather and fuel price headwinds, Norfolk Southern is focused on achieving its full-year guidance of $150 million in productivity and cost savings, along with a 150 basis point margin improvement on 3% revenue growth. The operating ratio for the remainder of the year needs to be under 64% to meet targets, but it won't be evenly spread across quarters. Q: How is the pricing environment affecting yields, particularly in merchandise and intermodal? A: Ed Elkins, CCO, noted that improved service has allowed Norfolk Southern to successfully take price in the merchandise sector, leading to increased customer trust and opportunities. In intermodal, pricing remains flat due to market conditions, but the company continues to leverage its service value for pricing. Q: With potential volume declines, how will Norfolk Southern manage costs and headcount? A: Mark George, CEO, stated that while a 5% volume decline would be significant, the company is not fully volume variable and will focus on productivity and efficiency. They are scenario planning for potential economic downturns and maintaining a strategic approach to hiring and attrition. Q: Can you elaborate on the network's performance and its impact on market opportunities? A: John Orr, COO, highlighted the network's resilience and quick recovery from storms, attributing it to capital investments and resource management. This efficiency allows Norfolk Southern to capitalize on market opportunities and maintain service reliability. Q: How is Norfolk Southern positioned to handle potential tariff impacts on revenue? A: Mark George, CEO, acknowledged the uncertainty surrounding tariffs but emphasized the company's diversified portfolio and strong service performance. While tariffs could present both challenges and opportunities, the focus remains on maintaining operational excellence and customer relationships to navigate potential impacts. For the complete transcript of the earnings call, please refer to the full earnings call transcript. This article first appeared on GuruFocus.
Yahoo
23-04-2025
- Business
- Yahoo
First look: Norfolk Southern earnings
Norfolk Southern Corp. on Wednesday reported a rebound in first-quarter profits despite slightly weaker revenue from a year ago as it recovered from severe winter weather across its network. The Atlanta-based railroad (NYSE: NSC) reported railway operating revenues of $3 billion, down $11 million compared to the first quarter of 2024. Income from railway operations was $1.1 billion, an increase of $933 million. Operating ratio in the quarter was 61.7% compared to 92.9% in the first quarter of 2024. Diluted earnings per share was $3.31, up from 23 cents, when the company agreed to a $600 million settlement following a major derailment in East Palestine, Ohio, in 2023. The company since the second quarter of 2024 continues to benefit from insurance payouts related to East Palestine. Those payments totaled $141 million in the first quarter. Income would have been $609 million, or $2.69 per share, compared to $2.49 per share a year ago, without the payments. 'Our service performance is increasing our customers' confidence in Norfolk Southern and allowing us to gain share,' said President and Chief Executive Mark George, in an earnings release. The improvement comes after a rocky 2024 when investor Ancora Holdings won three board seats in a failed bid to take over the carrier. Norfolk Southern later fired CEO Alan Shaw after it was discovered he had had an inappropriate relationship with a subordinate. Find more articles by Stuart Chirls Court turns down CSX antitrust suit against Norfolk Southern Congestion nicks CSX's earnings, volume and revenue Autonomous rail intermodal cars to begin testing this month The post First look: Norfolk Southern earnings appeared first on FreightWaves.
