NSC
$195.77
Norfolk Southern
$3.65
1.90%
Earnings Details
2nd Quarter June 2020
Wednesday, July 29, 2020 8:00:00 AM
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Summary

Norfolk Southern (NSC) Recent Earnings

Norfolk Southern (NSC) reported 2nd Quarter June 2020 earnings of $1.53 per share on revenue of $2.1 billion. The consensus earnings estimate was $1.39 per share on revenue of $2.2 billion. Revenue fell 28.7% compared to the same quarter a year ago.

Norfolk Southern Corp is engaged in the rail transportation of raw materials, intermediate products, & finished goods in the Southeast, East, and Midwest and, via interchange with rail carriers, to and from the rest of the United States.

Results
Reported Earnings
$1.53
Earnings Whisper
-
Consensus Estimate
$1.39
Reported Revenue
$2.09 Bil
Revenue Estimate
$2.21 Bil
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

Norfolk Southern reports second-quarter 2020 results

NORFOLK, Va., July 29, 2020 /PRNewswire/ -- Norfolk Southern Corporation (NYSE: NSC) today reported second-quarter financial results.

Second-quarter net income was $392 million, diluted earnings per share were $1.53, and the operating ratio was 70.7 percent.

"In a period when working safely and delivering for our customers was abruptly redefined, our employees responded by protecting each other and innovating to serve rapidly evolving freight demand. Underscoring our commitment to shareholder value, we forged ahead with our ongoing transformation by further reducing our hump yard footprint, achieving fuel efficiency gains, and increasing train size. These are astounding achievements while managing the unprecedented economic disruption and public health crisis," said James A. Squires, Norfolk Southern chairman, president and CEO. "We are mobilized and driven to meet the challenges and opportunities that lie ahead, and we will continue to create collaborative change and relentlessly pursue increased productivity as a leading supply chain partner throughout the economic recovery and beyond."   

Second-quarter summary

  • Railway operating revenues of $2.1 billion decreased 29 percent compared with second-quarter 2019, driven by a 26 percent decline in total volume.
  • Railway operating expenses of $1.5 billion decreased 21 percent compared with second-quarter 2019, driven by lower fuel, compensation and benefits, and purchased services expenses.
  • Income from railway operations was $610 million and the operating ratio was 70.7 percent.

About Norfolk Southern
Norfolk Southern Corporation (NYSE: NSC) is one of the nation's premier transportation companies. Its Norfolk Southern Railway Company subsidiary operates approximately 19,500 route miles in 22 states and the District of Columbia, serves every major container port in the eastern United States, and provides efficient connections to other rail carriers. Norfolk Southern is a major transporter of industrial products, including chemicals, agriculture, and metals and construction materials. In addition, the railroad operates the most extensive intermodal network in the East and is a principal carrier of coal, automobiles, and automotive parts.

Forward-looking statements
This news release contains forward-looking statements that may be identified by the use of words like "believe," "expect," "anticipate," "estimate," "plan," "consider," "project," and similar references to the future. Forward-looking statements reflect our good-faith evaluation of information currently available. These forward-looking statements are subject to a number of risks and uncertainties, and our actual results may differ materially from those projected. Please refer to our annual and quarterly reports filed with the SEC for a full discussion of those risks and uncertainties we view as most important. Additional risks include the impact of the COVID-19 pandemic on us, our customers, our supply chain, and our operations. Forward-looking statements are not, and should not be relied upon as, a guarantee of future performance or results, nor will they necessarily prove to be accurate indications of the times at or by which any such performance or results will be achieved. As a result, actual outcomes and results may differ materially from those expressed in forward-looking statements. We undertake no obligation to update or revise forward-looking statements.

http://www.norfolksouthern.com  

 

Norfolk Southern Corporation and Subsidiaries

Consolidated Statements of Income

(Unaudited)






Second Quarter


First Six Months


2020


2019


2020


2019


(in millions, except per share amounts)









Railway operating revenues








Merchandise

$

1,307


$

1,756


$

2,979


$

3,442

Intermodal

569


701


1,224


1,420

Coal

209


468


507


903

Total railway operating revenues

2,085


2,925


4,710


5,765









Railway operating expenses








Compensation and benefits

586


712


1,208


1,439

Purchased services and rents

372


418


775


842

Fuel

84


254


273


504

Depreciation

282


284


574


567

Materials and other

151


192


317


382

Loss on asset disposal



385



Total railway operating expenses

1,475


1,860


3,532


3,734









Income from railway operations

610


1,065


1,178


2,031









Other income – net

49


22


71


66

Interest expense on debt

156


153


310


302









Income before income taxes

503


934


939


1,795









Income taxes








Current

66


136


110


263

Deferred

45


76


56


133

Total income taxes

111


212


166


396









Net income

$

392


$

722


$

773


$

1,399









Earnings per share – diluted

$

1.53


$

2.70


$

3.00


$

5.21









Weighted average shares outstanding – diluted

256.7


267.1


257.7


268.3









See accompanying notes to consolidated financial statements

 

Norfolk Southern Corporation and Subsidiaries

Consolidated Balance Sheets

(Unaudited)






June 30,


December 31,


2020


2019


($ in millions)

Assets




Current assets:




Cash and cash equivalents

$

1,143


$

580

Accounts receivable – net

822


920

Materials and supplies

257


244

Other current assets

128


337

Total current assets

2,350


2,081





Investments

3,590


3,428

Properties less accumulated depreciation of $11,823




and $11,982, respectively

31,217


31,614

Other assets

805


800





Total assets

$

37,962


$

37,923





Liabilities and stockholders' equity




Current liabilities:




Accounts payable

$

1,268


$

1,428

Income and other taxes

239


229

Other current liabilities

343


327

Current maturities of long-term debt

85


316

Total current liabilities

1,935


2,300





Long-term debt

12,612


11,880

Other liabilities

1,680


1,744

Deferred income taxes

6,874


6,815





Total liabilities

23,101


22,739





Stockholders' equity:




Common stock $1.00 per share par value, 1,350,000,000 shares




  authorized; outstanding 255,109,247 and 257,904,956 shares,




  respectively, net of treasury shares

256


259

Additional paid-in capital

2,217


2,209

Accumulated other comprehensive loss

(475)


(491)

Retained income

12,863


13,207





Total stockholders' equity

14,861


15,184





Total liabilities and stockholders' equity

$

37,962


$

37,923









See accompanying notes to consolidated financial statements

 

Norfolk Southern Corporation and Subsidiaries 

Consolidated Statements of Cash Flows 

(Unaudited)




First Six Months


2020


2019


($ in millions)

Cash flows from operating activities




Net income

$

773


$

1,399

Reconciliation of net income to net cash provided by operating activities:




Depreciation

574


567

Deferred income taxes

56


133

Gains and losses on properties

(11)


(7)

Loss on asset disposal

385


Changes in assets and liabilities affecting operations:




Accounts receivable

98


(30)

Materials and supplies

(13)


(49)

Other current assets

30


55

Current liabilities other than debt


(30)

Other – net

(134)


(86)





Net cash provided by operating activities

1,758


1,952





Cash flows from investing activities




Property additions

(735)


(979)

Property sales and other transactions

258


214

Investment purchases

(5)


(12)

Investment sales and other transactions

(58)


(75)





Net cash used in investing activities

(540)


(852)





Cash flows from financing activities




Dividends

(482)


(458)

Common stock transactions

26


18

Purchase and retirement of common stock

(669)


(1,050)

Proceeds from borrowings

784


1,054

Debt repayments

(314)


(750)





Net cash used in financing activities

(655)


(1,186)





Net increase (decrease) in cash, cash equivalents, and restricted
cash

563


(86)





Cash, cash equivalents, and restricted cash




At beginning of year

580


446





At end of period

$

1,143


$

360





Supplemental disclosures of cash flow information




Cash paid during the period for:




Interest (net of amounts capitalized)

$

287


$

271

Income taxes (net of refunds)

1


215







See accompanying notes to consolidated financial statements






 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS:

1.  Stock Repurchase Program
We repurchased and retired 3.9 million and 5.7 million shares of common stock under our stock repurchase program during the first six months of 2020 and 2019, respectively, at a cost of $669 million and $1.1 billion, respectively. 

2.  Loss on Asset Disposal
In the first quarter of 2020, we committed to a plan to dispose of certain locomotives deemed excess and no longer needed for railroad operations.  Specifically, during the first six months of 2020, the Company recorded a charge related to the loss on the sale of approximately 450 locomotives disposed of in the first six months, and a write-down of approximately 250 additional locomotives that we are actively marketing to sell.   Accordingly, a $385 million loss was recorded to adjust their carrying amount to their estimated fair value. The loss on asset disposal reduced "Earnings per share – diluted" for the first six months by $1.11.

3.  Restricted Cash
The "Cash, cash equivalents, and restricted cash" line item on the Consolidated Statements of Cash Flows  includes restricted cash of $88 million in 2019, reflecting deposits held by a third-party bond agent as collateral for certain debt obligations which matured on October 1, 2019

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SOURCE Norfolk Southern Corporation