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$NSC 1Q15 10-Q: At March 31, 2015, cash and cash equivalents were $524MM vs. $973MM at Dec. 31, 2014. At March 31, 2015, investments were $2,701MM vs. $2,679MM at Dec. 31, 2014. Total debt-to-total capitalization ratio was 42.3% at March 31, 2015, vs. 42.1% at Dec. 31, 2014.
$NSC's BoD appointed Fredric Ehlers as chief information officer, effective immediately. In this new role, Ehlers will continue serving as VP information technology, a position he has held since 2013. Ehlers, based in Atlanta, also will continue reporting to Cynthia Earhart, EVP finance and CFO, who previously served as CIO.
$NSC announced the pricing of its offers to certain eligible holders to exchange outstanding debt securities for cash and up to $750MM aggregate principal amount of its new notes due 2052. It will pay interest on the new notes at a rate per annum equal to 4.050%, and an aggregate of $9.6MM cash consideration, including accrued and unpaid interest.
$NSC plans to consolidate its Central Division headquarters operations in Knoxville into three surrounding divisions, effective on or about Nov. 1, 2017. Dispatching responsibilities will be divided among operating divisions headquartered in Birmingham, Ala., Decatur, Ill., and Fort Wayne, Ind. This will affect about 50 employees.
$NSC stated that on the potential track reduction opportunities, the company is not seeing large pieces of the network coming out from a line standpoint. The company has got a network reach which is good for its customers. Consequently, one won't see big chunks of the railroad coming out, but cost will come out.
$NSC saw consistent pricing in 1Q17 with a year ago and the company is confident that it can drive good revenue complementing its network at low incremental cost. $NSC is continuing to see pressure in the trucking environment and is getting some significant competitive rate increases in its expert coal franchise.
Railroad operator $NSC reported a 12% jump in its 1Q17 earnings to $433MM from $387MM during 1Q16, mainly due to 7% rise in income from railway operations, as well as a lower effective income tax rate. Diluted EPS rose 15% YoY to $1.48 from $1.29. Railway operating revenues rose 6% YoY to $2.6Bil.
For 2016, $NSC’s cash flow from operations totaled $3Bil, covering Capex and generating $1.1Bil in free cash flow. Returns to shareholders in 2016 totaled $1.5Bil through $700MM of dividends and $800MM in share repurchases. The BoD increased the quarterly dividend to $0.61 a share, a 3% increase.
$NSC's merchandise revenue per unit increased 2% in 4Q16. Intermodal revenue per unit, excluding Triple Crown and fuel, increased 1%. Coal revenue per unit, excluding fuel, declined 2% with positive price improvement offset by negative mix related to reduced volume to longer-haul Southern utilities and increased export volume via Baltimore.
During 4Q16, $NSC’s merchandise revenue was affected by the ongoing decline of crude oil volumes. Overall revenue per unit declined 3% in 4Q16 as positive pricing was offset by mix associated with increased intermodal and decreased coal volume. Revenue per unit, excluding fuel, increased for both merchandise and intermodal.
$NSC said that it has planned to invest $1.9Bil in 2017 to maintain the safety of its rail network, enhance service, improve operational efficiency, and support growth opportunities, which is consistent with the total capital investment of $1.9Bil in 2016.
Railroad operator $NSC reported a 15% YoverY jump in 4Q16 earnings to $416MM, or $1.42 per diluted share. Railway operating revenue fell 1% YoverY to $2.5Bil, reflecting lower merchandise and coal traffic volume, as well as reduced fuel surcharges.