Norfolk Southern Corporation (NSC) Bundle
A Brief History of Norfolk Southern Corporation
Norfolk Southern Corporation (NSC) has a rich history that reflects its evolution in the railroad industry, marked by strategic expansions and financial milestones. As of 2024, NSC has established itself as a key player in the North American transportation sector.
Recent Financial Performance
In the third quarter of 2024, Norfolk Southern reported a net income of $1.099 billion, compared to $478 million in the same period of 2023. The diluted earnings per share (EPS) rose to $4.85, up from $2.10 year-over-year.
Cash Flow and Liquidity
For the first nine months of 2024, cash provided by operating activities totaled $3.1 billion, an increase from $2.5 billion in 2023. Cash and cash equivalents stood at $975 million as of September 30, 2024.
Investments and Acquisitions
On March 15, 2024, Norfolk Southern completed the acquisition of a 337-mile railway line from the Cincinnati Southern Railway for $1.7 billion. This acquisition is a significant addition to NSC's operational capacity.
Sales of Railway Lines
In September 2024, Norfolk Southern sold the Manassas Line to the Virginia Passenger Rail Authority for $357 million. The transaction included an upfront cash payment of $315 million, with the remainder expected by the end of 2027.
Revenue Breakdown
For the first nine months of 2024, Norfolk Southern reported total revenues of $8.2 billion, with merchandise revenues increasing due to higher average revenue per unit and improved volume. Revenue from intermodal services also showed a positive trend.
| Financial Metric | 2024 (YTD) | 2023 (YTD) | % Change |
|---|---|---|---|
| Net Income | $1.889 billion | $1.300 billion | 45% |
| Operating Cash Flow | $3.1 billion | $2.5 billion | 24% |
| Cash and Cash Equivalents | $975 million | $1.506 billion | -35% |
| Total Revenue | $8.2 billion | $8.5 billion | -4% |
Debt and Financing Activities
As of September 30, 2024, Norfolk Southern's long-term debt totaled $16.644 billion, down from $17.175 billion at the end of 2023. The company has maintained a robust credit profile, recently renewing its $800 million credit agreement set to expire in January 2029.
Operational Changes and Strategic Initiatives
In 2024, Norfolk Southern announced a restructuring initiative that led to the separation of approximately 350 management employees, resulting in restructuring charges of $61 million. These efforts are aimed at enhancing operational efficiency amid changing market dynamics.
Environmental and Legal Matters
The company is actively engaged in remediation efforts related to the environmental impact of an incident that occurred in 2023, with total expenses recognized amounting to $1.5 billion, offset by $653 million in insurance recoveries.
Norfolk Southern continues to adapt to the evolving landscape of the railroad industry, focusing on strategic growth, operational efficiency, and financial stability as it moves through 2024.
A Who Owns Norfolk Southern Corporation (NSC)
Major Shareholders
As of 2024, the ownership structure of Norfolk Southern Corporation (NSC) reflects a diverse mix of institutional investors, mutual funds, and individual shareholders. The following table outlines the major shareholders and their respective ownership stakes.
| Shareholder | Type | Ownership Percentage |
|---|---|---|
| The Vanguard Group, Inc. | Institutional Investor | 8.5% |
| BlackRock, Inc. | Institutional Investor | 8.2% |
| State Street Corporation | Institutional Investor | 6.9% |
| Wellington Management Group LLP | Institutional Investor | 5.1% |
| FMR LLC (Fidelity Investments) | Institutional Investor | 4.7% |
| Invesco Ltd. | Institutional Investor | 3.9% |
| Geode Capital Management, LLC | Institutional Investor | 3.4% |
| Other Individual and Institutional Investors | Various | 49.4% |
Insider Ownership
Insider ownership is another critical aspect to consider. As of late 2024, insiders hold a notable percentage of shares. The following table summarizes the insider ownership details.
| Insider Name | Position | Shares Owned | Percentage of Total Shares |
|---|---|---|---|
| Alan H. Shaw | President & CEO | 85,000 | 0.04% |
| Mark R. George | CFO | 45,000 | 0.02% |
| Other Executives | Various | 200,000 | 0.09% |
Institutional Ownership Trends
Institutional ownership has shown a steady trend over the past few years. The following table illustrates the changes in institutional ownership percentages over the last three years.
| Year | Institutional Ownership Percentage |
|---|---|
| 2022 | 74.0% |
| 2023 | 76.5% |
| 2024 | 77.2% |
Stock Performance
Norfolk Southern's stock performance has been influenced by various factors, including market trends, operational performance, and overall economic conditions. The following table provides a snapshot of the stock performance metrics for 2024.
| Metric | Value |
|---|---|
| Current Stock Price (as of September 30, 2024) | $230.50 |
| Market Capitalization | $52.0 billion |
| 52-Week High | $250.00 |
| 52-Week Low | $190.00 |
| Year-to-Date Return | 12.5% |
Conclusion on Ownership Dynamics
The ownership dynamics of Norfolk Southern Corporation are characterized by a robust presence of institutional investors, a growing trend in ownership percentage, and a moderate level of insider ownership, reflecting confidence in the company's future performance.
Norfolk Southern Corporation (NSC) Mission Statement
Overview of Mission Statement
The mission of Norfolk Southern Corporation (NSC) is to provide safe and efficient transportation services, with a commitment to operational excellence and customer satisfaction. The company aims to enhance its performance through innovation and sustainable practices, ensuring economic growth while minimizing environmental impact.
Core Values
- Safety: Prioritizing the safety of employees, customers, and communities.
- Integrity: Conducting business ethically and transparently.
- Innovation: Embracing new technologies and processes to improve efficiency.
- Customer Focus: Delivering exceptional service and value to customers.
- Sustainability: Commitment to environmentally responsible practices.
Financial Performance Indicators
In 2024, Norfolk Southern's financial performance reflects its strategic focus on operational efficiency and revenue growth. The following table summarizes key financial metrics for the third quarter and the first nine months of 2024 compared to 2023:
| Metric | Q3 2024 | Q3 2023 | Change (%) | First 9 Months 2024 | First 9 Months 2023 | Change (%) |
|---|---|---|---|---|---|---|
| Railway Operating Revenues ($ millions) | 3,051 | 2,971 | 3% | 9,099 | 9,083 | 0% |
| Railway Operating Expenses ($ millions) | 1,455 | 2,215 | (34%) | 6,159 | 7,040 | (13%) |
| Income from Railway Operations ($ millions) | 1,596 | 756 | 111% | 2,940 | 2,043 | 44% |
| Net Income ($ millions) | 1,099 | 478 | 130% | 1,889 | 1,300 | 45% |
| Diluted Earnings per Share ($) | 4.85 | 2.10 | 131% | 8.34 | 5.70 | 46% |
Operational Highlights
Norfolk Southern has made significant strides in improving its operational metrics. The railway operating ratio, a key measure of efficiency, improved markedly in the third quarter of 2024:
| Operational Metric | Q3 2024 | Q3 2023 | Change (%) | First 9 Months 2024 | First 9 Months 2023 | Change (%) |
|---|---|---|---|---|---|---|
| Railway Operating Ratio (%) | 47.7 | 74.6 | (36%) | 67.7 | 77.5 | (13%) |
Revenue Breakdown by Commodity Group
Norfolk Southern's revenue sources are diversified across various commodity groups. The following table illustrates the revenue contributions by major commodity categories in the third quarter of 2024:
| Commodity Group | Q3 2024 Revenue ($ millions) | Q3 2023 Revenue ($ millions) | Change (%) |
|---|---|---|---|
| Merchandise | 1,861 | 1,800 | 3% |
| Intermodal | 763 | 737 | 4% |
| Coal | 726 | 764 | (5%) |
Sustainability Initiatives
Norfolk Southern is committed to sustainability. The company aims to reduce its carbon footprint and enhance energy efficiency across its operations. As of 2024, the company has set ambitious goals to increase the use of fuel-efficient locomotives and improve its overall environmental performance.
Investment in Technology
The company is investing in advanced technologies to enhance operational efficiency and safety. This includes upgrades to its signaling systems and deployment of data analytics to optimize routing and scheduling.
Conclusion of Financial Year 2024
As Norfolk Southern Corporation continues to execute its mission of providing efficient and sustainable rail transportation, its financial and operational metrics indicate a positive trajectory towards achieving its strategic goals.
How Norfolk Southern Corporation (NSC) Works
Overview of Operations
Norfolk Southern Corporation (NSC) operates a major freight transportation network in the eastern United States, providing rail services to various industries. As of 2024, the company has focused on enhancing operational efficiency and reducing costs through strategic investments and restructuring efforts.
Financial Performance
In the third quarter of 2024, NSC reported railway operating revenues of $3,051 million, reflecting a 3% increase from $2,971 million in the third quarter of 2023. For the first nine months of 2024, revenues remained relatively stable at $9,099 million, compared to $9,083 million in the prior year.
Income and Expenses
For the third quarter of 2024, NSC's railway operating expenses decreased significantly to $1,455 million, down 34% from $2,215 million in the same quarter of 2023. This decline contributed to an income from railway operations of $1,596 million, a substantial increase of 111% year-over-year.
| Metric | Q3 2024 | Q3 2023 | Change (%) |
|---|---|---|---|
| Railway Operating Revenues | $3,051 million | $2,971 million | 3% |
| Railway Operating Expenses | $1,455 million | $2,215 million | -34% |
| Income from Railway Operations | $1,596 million | $756 million | 111% |
| Net Income | $1,099 million | $478 million | 130% |
| Diluted Earnings per Share | $4.85 | $2.10 | 131% |
Cash Flow and Liquidity
For the first nine months of 2024, NSC generated $3.1 billion in cash from operating activities, up from $2.5 billion in the same period of 2023. Cash and cash equivalents were reported at $975 million as of September 30, 2024.
Capital Expenditures
NSC's cash used in investing activities reached $2.8 billion for the first nine months of 2024, significantly higher than $1.4 billion in the previous year. This increase was primarily attributed to the acquisition of the Cincinnati Southern Railway assets for $1.7 billion.
Debt and Financing
As of September 30, 2024, NSC had no outstanding commercial paper. The company entered into a credit agreement allowing for up to $800 million in unsecured commercial paper, which is backed by a credit facility. Additionally, the accounts receivable securitization program has a maximum borrowing capacity of $400 million.
Operational Metrics
NSC's railway operating ratio improved to 47.7% in Q3 2024 from 74.6% in Q3 2023. The lower operating ratio indicates enhanced efficiency in managing operating expenses relative to revenues.
| Metric | Q3 2024 | Q3 2023 |
|---|---|---|
| Railway Operating Ratio | 47.7% | 74.6% |
Commodity Revenues
Merchandise revenues, which include agriculture, chemicals, metals, and automotive, accounted for a significant portion of total revenues. For Q3 2024, merchandise revenues totaled $1,861 million, up from $1,800 million in Q3 2023.
| Commodity | Q3 2024 Revenue | Q3 2023 Revenue |
|---|---|---|
| Agriculture, Forest and Consumer Products | $624 million | $611 million |
| Chemicals | $543 million | $498 million |
| Metals and Construction | $420 million | $417 million |
| Automotive | $274 million | $274 million |
Challenges and Strategic Initiatives
NSC faces challenges such as fluctuating fuel prices and varying demand across different market segments. The company is actively working to optimize operational performance and enhance customer service through technology and strategic partnerships.
Conclusion
Norfolk Southern Corporation continues to adapt to the changing landscape of the freight transportation industry, focusing on operational efficiency and financial stability.
How Norfolk Southern Corporation (NSC) Makes Money
Overview of Revenue Streams
Norfolk Southern Corporation generates revenue primarily through railway operations, which include the transportation of various commodities. The company’s revenue is categorized into three main segments: Merchandise, Intermodal, and Coal. Each segment contributes differently to the overall revenue based on market demand and pricing structures.
Railway Operating Revenues
In the third quarter of 2024, Norfolk Southern reported railway operating revenues of $3,051 million, a 3% increase from $2,971 million in the same period of 2023. For the first nine months of 2024, total railway operating revenues were $9,099 million, slightly up from $9,083 million in 2023.
| Revenue Stream | Q3 2024 ($ million) | Q3 2023 ($ million) | First 9 Months 2024 ($ million) | First 9 Months 2023 ($ million) |
|---|---|---|---|---|
| Merchandise | 1,861 | 1,800 | 5,628 | 5,504 |
| Intermodal | 763 | 737 | 2,250 | 2,296 |
| Coal | 427 | 434 | 1,221 | 1,283 |
| Total Revenue | 3,051 | 2,971 | 9,099 | 9,083 |
Merchandise Revenue Breakdown
Merchandise revenues reflect a variety of products transported, including agricultural goods, chemicals, metals, and automotive products. In Q3 2024, merchandise revenue increased by 3% year-over-year, driven by higher volumes in specific categories.
| Commodity Group | Q3 2024 Revenue ($ million) | Q3 2023 Revenue ($ million) | First 9 Months 2024 Revenue ($ million) | First 9 Months 2023 Revenue ($ million) |
|---|---|---|---|---|
| Agriculture, Forest & Consumer Products | 624 | 611 | 1,875 | 1,891 |
| Chemicals | 543 | 498 | 1,602 | 1,542 |
| Metals & Construction | 420 | 417 | 1,290 | 1,232 |
| Automotive | 274 | 274 | 861 | 839 |
| Total Merchandise Revenue | 1,861 | 1,800 | 5,628 | 5,504 |
Intermodal Revenue
Intermodal revenue, which includes the transportation of containers and trailers, saw a 4% increase in Q3 2024 compared to Q3 2023. This segment is driven by the demand for efficient shipping solutions connecting rail and truck transport.
Coal Revenue
Coal revenues decreased slightly in Q3 2024, contributing $427 million compared to $434 million in Q3 2023. The decline reflects market fluctuations and changes in demand.
Operating Expenses
Norfolk Southern’s railway operating expenses for Q3 2024 totaled $1,455 million, a significant decrease of 34% from $2,215 million in Q3 2023. For the first nine months of 2024, operating expenses were $6,159 million, down from $7,040 million in 2023.
| Expense Type | Q3 2024 ($ million) | Q3 2023 ($ million) | First 9 Months 2024 ($ million) | First 9 Months 2023 ($ million) |
|---|---|---|---|---|
| Compensation and Benefits | 690 | 715 | 2,126 | 2,098 |
| Purchased Services and Rents | 497 | 517 | 1,541 | 1,519 |
| Fuel | 216 | 289 | 757 | 867 |
| Depreciation | 339 | 326 | 1,011 | 968 |
| Total Operating Expenses | 1,455 | 2,215 | 6,159 | 7,040 |
Net Income and Earnings Per Share
Norfolk Southern's net income for Q3 2024 was $1,099 million, a 130% increase compared to $478 million in Q3 2023. For the first nine months of 2024, net income was $1,889 million, up from $1,300 million in the same period last year. The diluted earnings per share (EPS) for Q3 2024 was $4.85, compared to $2.10 in Q3 2023.
| Metric | Q3 2024 | Q3 2023 | First 9 Months 2024 | First 9 Months 2023 |
|---|---|---|---|---|
| Net Income ($ million) | 1,099 | 478 | 1,889 | 1,300 |
| Diluted EPS | 4.85 | 2.10 | 8.34 | 5.70 |
Conclusion on Financial Performance
Norfolk Southern has demonstrated robust financial performance in 2024, driven by effective cost management and increased operational efficiency. The company’s strategic focus on enhancing service quality and operational productivity has resulted in improved margins and significant gains in net income and earnings per share.
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Article updated on 8 Nov 2024
Resources:
- Norfolk Southern Corporation (NSC) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Norfolk Southern Corporation (NSC)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Norfolk Southern Corporation (NSC)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.