Norfolk Southern Corp (NYSE:NSC) Q2 2020 Earnings Conference Call - Final Transcript
Jul 29, 2020 • 08:45 am ET
Greetings, and welcome to the Norfolk Southern Corporation's Second Quarter 2020 Earnings Call. [Operator Instructions]
It is now my pleasure to introduce Pete Sharbel, Director of Investor Relations. Thank you, Mr. Sharbel. You may now begin.
Thank you, and good morning, everyone. Please note that during today's call, we may make certain forward-looking statements, 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 for a full discussion of those risks and uncertainties we view as most important. Our presentation slides are available at norfolksouthern.com in the Investors section along with our non-GAAP reconciliation. Additionally, a transcript and downloads will be posted after the call.
It is now my pleasure to introduce Norfolk Southern's Chairman, President and CEO, Jim Squires.
James A. Squires
Good morning, everyone, and welcome to Norfolk Southern's Second Quarter 2020 Earnings Call. Joining me today are Alan Shaw, Chief Marketing Officer; Mark George, Chief Financial Officer; and Mike Wheeler, Chief Operating Officer. As we announced earlier this week, Mike will retire from Norfolk Southern on October one after a 35-year career of distinguished achievement. He will be greatly missed, and we wish him well. When we began the search for our next Chief Operating Officer, we looked for an experienced executive who could lead our day-to-day operations and build on our successful implementation of precision scheduled railroading. We are proud to welcome Cindy Sanborn, one of our industry's leading operations experts, to the Norfolk Southern team. We look forward to Cindy joining the company on September 1. With that, let's proceed to a review of our second quarter performance. Amid the global pandemic and ensuing economic disruption in the markets and communities we serve, the men and women of Norfolk Southern demonstrated their resilience in the second quarter. Our customers in virtually every segment shipped significantly lower volumes, with many changing their shipping patterns as they work to keep the supply lines open.
The automotive industry was particularly volatile, experiencing a rapid and almost total shutdown, and then a subsequent restart and push to restock inventory, all within the same quarter. Norfolk Southern's business reflected that disruption. Revenues decreased 29%, leading to a decline of 43% in earnings per share. Our team rose to the challenge. We quickly adjusted network plans and resources in the short term while advancing our long-term strategy to deliver shareholder value with several important achievements. First, Norfolk Southern employees are serving our customers and our country with excellence during the pandemic. The successful implementation of our TOP21 strategic plan and precision scheduled railroading, combined with the hard work and commitment of our employees, is producing results. We achieved record train performance, train speed, terminal dwell and shipment consistency. Many other service metrics were near all-time best levels. Second, we managed our operations efficiently as shipping volumes bottomed out, while ensuring we have strong operating leverage as business recovers. Year-over-year in the second quarter, our force levels declined by 20%.