Norfolk Southern, Canadian National Earnings Slip in Second Quarter
Weaker energy-related freight shipments led two more North American railroads to report lower second-quarter earnings, including a decline of 6% at Norfolk Southern Corp. and 3% at Canadian National Railway.
Norfolk Southern’s coal revenue fell 25%, helping to push net income to $405 million, or $1.36 per share. Canadian National tied its decline in net income to C$858 million ($665.1 million), or C$1.10, to fewer shipments of crude oil, pipe and steel as well as a drop in coal volume.
The results followed weaker profits at CSX and Union Pacific Railroad.
Revenue declined 10% at Norfolk Southern to $2.5 billion and 9% at CN to C$2.84 billion.
Truck/rail freight volumes were 5% lower, and revenue fell 15% at Norfolk Southern, mostly due to a restructuring that eliminated most Triple Crown unit business late last year. Intermodal freight fell 7% at Canadian National.
Montreal-based CN lowered its operating ratio to 54.5, a 1.9 percentage-point improvement. Norfolk, Virginia-based NS had a 68.6 operating ratio, 1.4 percentage points better than the 2015 quarter.
Luc Jobin, CEO of CN, said the company expects improved second-half freight volumes, compared with the second quarter, including more lumber and automotive shipments. NS didn’t give a forecast.