USA: ‘Norfolk Southern’s financial results in 2018 clearly demonstrate improved financial performance and our commitment to delivering shareholder value’, said NS Chairman, President & CEO James A Squires when presenting the railway’s annual results on January 24. s
‘Our confidence to deliver improved value to our shareholders – as underscored by our recently announced dividend increase – is heightened by NS’ momentum heading into 2019 and by an array of initiatives to serve customers better and operate more efficiently.’
Income from railway operations was up 12% to an all-time record $4bn, and the operating ratio was a record 65·4.
Net income was $2·67bn for the year with diluted earnings per share of $9·51. Net income was down by $2·74bn from 2017, although the 2017 results had benefited from tax adjustments; net income would have increased by 39% and diluted earnings per share by $2·90 or 44% without these effects.
Railway operating revenues of $11·5bn were up 9% in 2018 compared with the previous year, thanks to an increase in revenue per unit, including increased rates as well as higher fuel surcharge revenue and higher volumes. Overall volumes were up 4%, reflecting growth in the major commodity categories of intermodal and merchandise, which offset a decline in coal.
Operating expenses of $7·5bn increased $470m or 7% compared with 2017, when the tax adjustments decreased operating expenses by $151m. Factors in the increase included higher diesel fuel prices, volume-related expenses and increased costs associated with overall lower network velocity, partially offset by higher property sales.