Eastern Railroad Discussion > NS Sets Quarterly Record in 2nd Quarter

http://0.gravatar.com/avatar/3e5706924b99c2e99ef1f023069802e9?s=50&d=identicon&r=GNS Set Quarterly Records in 2nd Quarterby csanders429Norfolk Southern said on Wednesday that it set records in the second quarter of 2021 for net income and diluted earnings per share, operating ratio and income from railway operations.
https://akronrrclub.files.wordpress.com/2016/01/ns-logo-2.jpg?w=560In a news release, NS said net income rose 109 percent to $819 million, or $3.28 diluted earnings per share from $392 million, or $1.53 diluted EPS, in the same quarter a year ago.
Income from railway operations rose 91 percent to $1.2 billion while the operating ratio was a record 58.3 percent from 70.7 percent a year ago.
Railway operating revenue of $2.8 billion increased 34 percent, driven by a 25 percent increase in volume and a 7 percent increase in revenue per unit. Railway operating expenses totaled $1.6 billion, an increase of 11 percent.
 “We are even more confident about growth for the balance of this year,” NS CEO James Squires said during an earnings call.
NS executives said they expect revenue to increase by 12 percent this year, up from the previous forecast of 9 percent growth.
They project shaving up to 4.4 points off the operating ratio this year, an improvement from their earlier projection of a 3-point improvement.
Overall traffic volume was up 25 percent including a 29 percent gain in merchandise traffic, a 20 percent rise in intermodal and a 55 percent gain in coal traffic.
All figures are in comparison with the second quarter of 2020, which was marked by an economic downturn triggered by the COVID-19 pandemic.
“We are approaching pre-pandemic revenue levels,” said NS Chief Marketing Officer Alan Shaw. “However, the composition of our business has changed dramatically due to  . . . trends in the overall economy that were accelerated by the pandemic.”
Shaw said one example of how NS was able to take advantage of those changes is carrying traffic serving consumer and manufacturing markets in the East.
Even as NS traffic grew during the second quarter, its payroll was 8 percent smaller.
Train are longer (14 percent) and heavier (16 percent). Yet the railroad said fuel efficiency improved 4 percent.
“These gains were achieved in part by the increased deployment of distributed power and more blending of previously separate traffic types on the same train,” Chief Operating Officer Cindy Sanborn said.
Sanborn said that in order to accommodate longer trains NS plans to lengthen passing sidings on some routes. She attributed the fuel efficiency gains to longer train lengths.
NS now has 1 percent fewer locomotives than it did a year ago. It has retired older locomotives and stepped up converting DC units to AC traction.
Fewer locomotives are being bad ordered spending time in repair shops. The NS locomotive workforce has fallen by 55 percent in size compared with 2018.
NS officials said they are focusing on improving local service in yards by changing staffing to make service more consistent and terminals more productive. More remote control locomotives are being in used as part of these efforts.
Sanborn said NS has reduced switching volume in Chicago by building trains in its Elkhart, Indiana, yard that can be directly interchanged with other railroads.
Train crews have received smartphones that allow them to provide real-time reporting of switching moves. NS plans to implement a new local train reporting application this summer to improve reporting of first- and last-mile service.   

So why did the stock price drop $8 a share that morning of release of number and ended the day Down $6 a share -2.6%?

PlyWoody Wrote:
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> So why did the stock price drop $8 a share that
> morning of release of number and ended the day
> Down $6 a share -2.6%?

Likely due to the fear mongering and looming lockdowns over the Delta variant 

I took out my corporate word salad decoder ring.


> “These gains were achieved in part by the
> increased deployment of distributed power and more
> blending of previously separate traffic types on
> the same train,” Chief Operating Officer Cindy
> Sanborn said.

Decoded: We combined trains to make them longer in order to use fewer employees


> Sanborn said that in order to accommodate longer
> trains NS plans to lengthen passing sidings on
> some routes.

Decoded:  Some on Wall St. are getting whiffs that this PSR is
all B.S. and meltdowns are spreading.  So we will make talk like
we are going to do something to increase fluidity. Plans  are just that plans.
Will we really do anything? No, not when that money could be used
for dividends and stock buy backs.


> The NS locomotive workforce
> has fallen by 55 percent in size compared with
> 2018.

Decode: All the talk about longer trains are more fuel efficient is B.S.
We are butchering the ranks of workers to sustain the scam.

> NS officials said they are focusing on improving
> local service in yards by changing staffing to
> make service more consistent and terminals more
> productive.

Decode:  We will cut yard jobs to the bone.

>More remote control locomotives are
> being in used as part of these efforts.

Decode: More engineers out of work.

> Sanborn said NS has reduced switching volume in
> Chicago by building trains in its Elkhart,
> Indiana, yard that can be directly interchanged
> with other railroads.

Decode: None of you investors will have any idea that when
the Elkhart yard was built its purpose was to make up trains for
direct interchange in Chicago.


> Train crews have received smartphones that allow
> them to provide real-time reporting of switching
> moves. NS plans to implement a new local train
> reporting application this summer to improve
> reporting of first- and last-mile service.   

Decode: The last clerk will please turn out the lights as 
the NS P.D. escort you out the door.

I guess the entire house of cards will collapse when there are
no longer any employees left to throw on the street. 

Any clear thinking outsider would wonder how competent NS
management is when they were unable to develop a Chief 
Operating Officer from within their own ranks. Someone who
really knows the system and the traffic base. 
 

It was a good earnings report, and good outlook for the overall business.

Posted from Android

Lackawanna484 Wrote:
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> It was a good earnings report, and good outlook
> for the overall business 


 Posted from AndIncome from railway operations rose 91 percent to $1.2 billion while the operating ratio was a record 58.3 percent from 70.7 percent a year ago. Mostly built on job cuts on crews, shop personnel, maintains personnel, less locomotives per train. On the Pittsburgh line trains almost routinely get into trouble with being under powered, pulled draw bars and knuckles, etc.  Yet the customers have sub par service a lot of times, dwell times are longer etc. How long can this go on? God only knows. What happens when NS cant sideline anymore locomotives or have enough folks to repair them or have sufficient maintenance personnel to keep the tracks in good repair. Then what will the shareholders and upper management do when they cut NS to the bare bone?  They may try to sell off NS in whole or piece mill. Any takers?

SantaFeRuss


Englewood Wrote:
-------------------------------------------------------
> I took out my corporate word salad decoder ring.
>
>
> > “These gains were achieved in part by the
> > increased deployment of distributed power and
> more
> > blending of previously separate traffic types
> on
> > the same train,” Chief Operating Officer
> Cindy
> > Sanborn said.
>
> Decoded: We combined trains to make them longer in
> order to use fewer employees
>
>
> > Sanborn said that in order to accommodate
> longer
> > trains NS plans to lengthen passing sidings on
> > some routes.
>
> Decoded:  Some on Wall St. are getting whiffs
> that this PSR is
> all B.S. and meltdowns are spreading.  So we will
> make talk like
> we are going to do something to increase
> fluidity. Plans  are just that plans.
> Will we really do anything? No, not when that
> money could be used
> for dividends and stock buy backs.
>
>
> > The NS locomotive workforce
> > has fallen by 55 percent in size compared with
> > 2018.
>
> Decode: All the talk about longer trains are more
> fuel efficient is B.S.
> We are butchering the ranks of workers to sustain
> the scam.
>
> > NS officials said they are focusing on
> improving
> > local service in yards by changing staffing to
> > make service more consistent and terminals more
> > productive.
>
> Decode:  We will cut yard jobs to the bone.
>
> >More remote control locomotives are
> > being in used as part of these efforts.
>
> Decode: More engineers out of work.
>
> > Sanborn said NS has reduced switching volume in
> > Chicago by building trains in its Elkhart,
> > Indiana, yard that can be directly interchanged
> > with other railroads.
>
> Decode: None of you investors will have any idea
> that when
> the Elkhart yard was built its purpose was to make
> up trains for
> direct interchange in Chicago.
>
>
> > Train crews have received smartphones that
> allow
> > them to provide real-time reporting of
> switching
> > moves. NS plans to implement a new local train
> > reporting application this summer to improve
> > reporting of first- and last-mile
> service.   
>
> Decode: The last clerk will please turn out the
> lights as 
> the NS P.D. escort you out the door.
>
> I guess the entire house of cards will collapse
> when there are
> no longer any employees left to throw on the
> street. 
>
> Any clear thinking outsider would wonder how
> competent NS
> management is when they were unable to develop a
> Chief 
> Operating Officer from within their own ranks.
> Someone who
> really knows the system and the traffic base. 
>  

Englewood well said.


SantaFeRuss



Edited 1 time(s). Last edit at 07/30/21 09:02 by SantaFeRuss.

Organizational experts often debate whether a leader should be "somebody from the inside" or "an outsider who isn't locked into the way things have always been done".

Having a mix of both types leading the organization is probably useful.  Terminating people and lines of business you know and like is not for the faint of heart.

-----------------------------------------------



 

MS Sanborn thinks she "lnvented the wheel".    I worked on the PC Chicago division as an STO and TM in the 1970s and we were building solid run-through trains at Elkhart to the western roads.  They were NYQ (CB&Q), LS21 (Rock Island), CNW1 and CNW3 to the C&NW), NC1 (Milwaukee Road), SF1 and SF3 (Santa Fe).  These were inaugurated by the progressive New York Central in the 1960s!

Lackawanna484 Wrote:
-------------------------------------------------------

> Having a mix of both types leading the
> organization is probably useful.  Terminating
> people and lines of business you know and like is
> not for the faint of heart.
>

Destroying 100+ year old companies takes a special breed.

Englewood Wrote:
-------------------------------------------------------
> Lackawanna484 Wrote:
> --------------------------------------------------
> -----
>
> > Having a mix of both types leading the
> > organization is probably useful.  Terminating
> > people and lines of business you know and like
> is
> > not for the faint of heart.
> >
>
> Destroying 100+ year old companies takes a special
> breed.

I dunno. Some ancient companies like GE and AT&T blew themselves up with home grown talent.

Posted from Android

Lackawanna484 Wrote:
-------------------------------------------------------
> Englewood Wrote:
> --------------------------------------------------
> -----
> > Lackawanna484 Wrote:
> >
> --------------------------------------------------
>
> > -----
> >
> > > Having a mix of both types leading the
> > > organization is probably useful. 
> Terminating
> > > people and lines of business you know and
> like
> > is
> > > not for the faint of heart.
> > >
> >
> > Destroying 100+ year old companies takes a
> special
> > breed.
>
> I dunno. Some ancient companies like GE and AT&T
> blew themselves up with home grown talent.
>
> Posted from Android

It is call inbreeding. GM almost done itself in from inbreeding.

JETRR Wrote:
-------------------------------------------------------
>
> It is call inbreeding. GM almost done itself in
> from inbreeding.

Yes. That's why a mix of insiders and new people can offer benefits to many companies.

pt199 Wrote:
-------------------------------------------------------

> NS officials said they are focusing on improving
> local service in yards by changing staffing to
> make service more consistent and terminals more
> productive. 

NS will be eliminating the yardmaster positions in North Charleston (7 Mile) and Spartanburg (Hayne) by September, and shifting all of the responsibilities to the yardmaster in Columbia (Andrews yard) SC. Given the complexities at each individual location, I seriously doubt that all of these terminals will be "more productive"/ Most likely they'll be "more gridlocked"...

But hey, they raised the dividend by a dime today, second increase this year...  
 

Lackawanna484 Wrote:
-------------------------------------------------------
> Englewood Wrote:
> --------------------------------------------------
> -----
> > Lackawanna484 Wrote:
> >
> --------------------------------------------------
>
> > -----
> >
> > > Having a mix of both types leading the
> > > organization is probably useful. 
> Terminating
> > > people and lines of business you know and
> like
> > is
> > > not for the faint of heart.
> > >
> >
> > Destroying 100+ year old companies takes a
> special
> > breed.
>
> I dunno. Some ancient companies like GE and AT&T
> blew themselves up with home grown talent.
>
> Posted from Android

Nope, they all blew up to incompetency and greed! I have worked for several companies that went down the tubes using the same business model that Norfolk Southern is using now, increase profits through headcount reduction. It is true that every company needs to constantly change to survive, but not by outsourcing everything. It will get to the point where there is nothing left to cut.
 

raytc1944 Wrote:
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> MS Sanborn thinks she "lnvented the wheel".   

I doubt it.  She is well aware of how a hump yard east of Chicago works.  She might sell it like that to the stockholders, but she knows the history.

She is a good leader.  She gets a lot of crap from the macho insecurities that infests the generation that is leaving the work force.   She does a good job dealing with those dinosaurs as well.

Typhoon Wrote:
-------------------------------------------------------
> raytc1944 Wrote:
> --------------------------------------------------
> -----
> > MS Sanborn thinks she "lnvented the wheel".
>   
>
> I doubt it.  She is well aware of how a hump yard
> east of Chicago works.  She might sell it like
> that to the stockholders, but she knows the
> history.
>
> She is a good leader.  She gets a lot of crap
> from the macho insecurities that infests the
> generation that is leaving the work force.   She
> does a good job dealing with those dinosaurs as
> well.

Typhoon, what's your view on how well she handled her role in CSX before the Hunter Harrison arrival?

There are mixed views about whether CSX was a mis-managed mess, or a reasonably well run railroad getting better.

RayH Wrote:
-------------------------------------------------------
> pt199 Wrote:
> --------------------------------------------------
> -----
>
> > NS officials said they are focusing on
> improving
> > local service in yards by changing staffing to
> > make service more consistent and terminals more
> > productive. 
>
> NS will be eliminating the yardmaster positions in
> North Charleston (7 Mile) and Spartanburg (Hayne)
> by September, and shifting all of the
> responsibilities to the yardmaster in Columbia
> (Andrews yard) SC. Given the complexities at each
> individual location, I seriously doubt that all of
> these terminals will be "more productive"/ Most
> likely they'll be "more gridlocked"...
>
> But hey, they raised the dividend by a dime today,
> second increase this year...  
>  


As if things are not gridlocked as they are across the system..??!! You simply can't make this stuff up....

Things will get interesting as tomorrow is the "official" start of the shipping season.

To quote Q from Star Trek, "The hall is rented, the orchestra engaged. It's now time to see if you can dance"....??!!!

Posted from Android



Edited 2 time(s). Last edit at 07/31/21 08:52 by ns1000.

Lackawanna484 Wrote:
-------------------------------------------------------
> Typhoon Wrote:
> --------------------------------------------------
> -----
> > raytc1944 Wrote:
> >
> --------------------------------------------------
>
> > -----
> > > MS Sanborn thinks she "lnvented the wheel".
> >   
> >
> > I doubt it.  She is well aware of how a hump
> yard
> > east of Chicago works.  She might sell it like
> > that to the stockholders, but she knows the
> > history.
> >
> > She is a good leader.  She gets a lot of crap
> > from the macho insecurities that infests the
> > generation that is leaving the work force.  
> She
> > does a good job dealing with those dinosaurs as
> > well.
>
> Typhoon, what's your view on how well she handled
> her role in CSX before the Hunter Harrison
> arrival?
>
> There are mixed views about whether CSX was a
> mis-managed mess, or a reasonably well run
> railroad getting better.

I think overall she did a good job while there.  She made two major mistakes while in her role at CSX.  First, she bought into the stupid rolling 28 hour Q train departure.  It wasn't her idea, but she implemented it.   Second, and this is 20/20 hind sight, she should have stuck around another month or so.  She would have been running the place, had she still been there when EHH died.

I suspect she is next in line at NS when Squires either steps down or is shown the door.

CW

Posted from iPhone