Norfolk Southern Corporation has reported its net income increased 2 percent to $460 million for the third quarter of 2016 when compared to last year’s third quarter net income of $452 million. Diluted earnings per share increased 4 percent to $1.55 when compared with $1.49 reported in the same quarter of last year.
“Our continued focus on efficiency and asset utilization, balanced with our commitment to customer service, drove an operating ratio of 67.5 percent for the quarter and a record 68.7 percent for the first nine months, setting us well on the way to achieving productivity savings of about $250 million and an operating ratio below 70 percent for the year -- even in the face of economic headwinds,” said Norfolk Southern Chairman, President and CEO James A. Squires.
“As we move forward, we are well positioned for growth opportunities longer term and confident in our ability to drive shareholder value,” added Squires.
Railway operating revenues for the third quarter were $2.5 billion, a 7 percent decrease compared with last year’s third quarter. Total volume dropped by 4 percent to 1.9 million units for the quarter.
Railway operating expenses dropped 10 percent to $1.7, primarily due to expense reduction initiatives, reduced fuel expenses, the absence of last year’s restructuring costs, and gains from the disposition of operating property. These decreases were partially offset by higher incentive compensation expense related to improved operating results. The operating ratio was 67.5 percent, a 220 basis point improvement compared with 69.7 percent in the third quarter of last year.
Merchandise revenues totaled $1.6 billion, down 4 percent compared to the same period last year. Volume decreased 4 percent, primarily due to fewer crude oil, vehicles, pulpboard and feed market shipments.
Intermodal revenues declined by 7 percent to $575 million for the quarter. Volume declined 1 percent primarily due to lower Triple Crown Services volume, a result of last year’s restructuring.
Income from railway operations was $820 million, flat compared to the 2015 third quarter.