Norfolk Southern reports 7% increase in operating revenues

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Railway operating revenues of $2.7bn increased 7% compared with Q4 2016, as overall volumes were up 5%, reflecting growth in all three major commodity categories of intermodal, coal and merchandise. Railway operating expenses decreased $74m, or 4%, to $1.7bn compared with the same period last year.

For the full year 2017, railway operating revenues increased 7% to $10.6bn compared with 2016, as overall volumes were up 5%. Railway operating expenses of $7.0bn increased $151m, or 2%, compared with last year. Expenses related to higher diesel fuel prices, increased incentive compensation, higher inflationary costs and volume growth were offset in part by efficiency savings and the $151m benefit from tax reform.

Net income for the quarter was $3,968m and diluted earnings per share were $13.79. For the year, net income was $5,404m and diluted earnings per share were $18.61. These results include effects of the enactment of the Tax Cuts and Jobs Act of 2017, which added $3,482m to net income in both periods and increased diluted earnings per share by $12.10 for the quarter and $12.00 for the year.

Absent the effects of tax reform, Q4 adjusted net income was $486m, and adjusted diluted earnings per share of $1.69, compared with $416m, and $1.42 per diluted share, during the same period of 2016. For the year, adjusted net income was $1,922m versus $1,668 million in 2016. Adjusted diluted earnings per share were $6.61, an 18 percent increase over last year’s record diluted earnings per share of $5.62.

“Norfolk Southern is open for growth, and we are optimistic as we head into 2018 that the current economic environment will provide an opportunity for continuing growth,” said James A. Squires, Norfolk Southern chairman, president and CEO.

For 2017, Norfolk Southern invested over $1.7bn in capital – reinvesting in the maintenance of its rail infrastructure and supporting economic growth. These investments range from sidings that better support network fluidity, to terminal expansions that accommodate volume growth, to roadway infrastructure that supports regional competitiveness. The recently-completed Portageville Bridge is one example; funded through a public-private partnership. Norfolk Southern also realized new business in 2017 from 75 industries it assisted in locating or expanding along its lines – representing a customer investment of over one billion dollars.

Looking forward in 2018 with respect to capital deployment, Norfolk Southern plans to invest $1.8bn to maintain the safety of its rail network, enhance service, improve operational efficiency, and support growth.

Source: Norfolk Southern