Q2 2024 Norfolk Southern Corp Earnings Call Transcript
Key Points
- Norfolk Southern Corp (NSC) reported adjusted operating income of $1.1 billion, net income of $694 million, and diluted earnings per share of $3.06.
- The company achieved a 480 basis point sequential margin improvement on its adjusted operating ratio, reaching 65.1% in Q2.
- NSC posted record performance in several key merchandise measures, including automotive and intermodal markets.
- The company demonstrated significant progress in operational metrics, including a 6% improvement in car velocity and a reduction of 3% in cars online.
- NSC's commitment to safety resulted in a best-in-class mainline accident rate and a reduction in unscheduled train stops by 18% in Q2.
- Revenue growth expectations for the full year were lowered from approximately 3% to around 1% due to continuing market headwinds.
- Intermodal revenue was flat, with an 8% increase in volume offset by an 8% decline in revenue per unit (RPU).
- Coal revenue declined by 3% due to a 2% volume decrease and challenges in the utility space.
- The company faces a $25 million step-up in compensation and benefits costs in Q3 due to a contractual wage increase.
- Adverse mix within business lines remains a headwind, impacting revenue per unit despite volume growth in merchandise.
Good afternoon, ladies and gentlemen, and welcome to Norfolk Southern second-quarter 2024 earnings call. (Operator Instructions) This call is being recorded on Thursday, July 25, 2024. I would now like to turn the conference over to Luke Nichols, Senior Director of Investor Relations. Luke, please go ahead.
Thank you, and good afternoon, everyone. Please note that during today's call, we will make certain forward-looking statements within the meaning of the safe harbor provision of the Private Security and Litigation Reform Act of 1995. These statements relate to future events or future performance of Norfolk Southern Corporation which are subject to risks and uncertainties and may differ materially from actual results. Please refer to our annual and quarterly reports filed with the SEC.
Our presentation slides are available at norfolksouthern.com in the investor section, along with our reconciliation of any non-GAAP measures used today to the comparable GAAP measures, including
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