According to a press release from Union Pacific (UP), the railroad’s safety programs have contributed to a 5 percent decline in vehicle-train collisions at crossings for the first half of 2017, as compared to last year.
Click here to read more from Union Pacific.
Tag: UP
CSX
Net Earnings: $510 million or $0.55 per share, up 15 percent from $445 million or $0.47 per share from 2016’s second quarter earnings results
Revenue: Increased 8 percent to $2,933 million
Operating Income: $958 million, up 14 percent
Operating Ratio: 67.4 percent, down from 68.9 percent
Click here to read CSX’s full earnings report.
KCS
Net Earnings: $135 million or $1.27 per diluted share, up from 2016 second quarter’s reported $121 million or $1.11 per diluted share
Revenue: Record second quarter revenues of $656 million, a 15 percent increase from the second quarter of 2016
Operating Income: All-time record of $239 million, an increase of 9 percent from the second quarter of 2016
Operating Ratio: 63.5 percent, a 2.2 increase from second quarter 2016
Click here to read KCS’s full earnings report.
CP
Net Earnings: Rose 46 percent to C$480 million or C$3.27 per diluted share (a second quarter record)
Revenue: C$1.64 billion, up 13 percent
Operating Income: A second-quarter record of C$679 million, up 23 percent
Operating Ratio: Improved 330 basis points to a second quarter record of 58.7 percent
Click here to read CP’s full earnings report.
UP
Net Earnings: $1.2 billion or $1.45 per diluted share (a second quarter record), as compared to the $1.0 billion or $1.17 per diluted share reported for the second quarter of 2016
Revenue: Up 10 percent to $5.3 billion
Operating Income: Up 21 percent to $2.0 billion
Operating Ratio: A second quarter record of 61.8 percent, a 3.4 point improvement compared to the second quarter 2016
Click here to read UP’s full earnings report.
CN
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Net Earnings: Increased 20 percent to C$1,031 million and diluted earnings per share increased 24 percent to C$1.36
Revenue: Increased 17 percent to a quarterly record of C$3,329 million
Operating Income: Increased 16 percent to C$1,495 million
Operating Ratio: Increased 0.6 points to 55.1 percent
Click here to read CN’s full earnings report.
NS
Net Earnings: Up 23 percent to $497 million while diluted earnings per share increased 26 percent to $1.71
Revenue: Increased 7 percent to $2.6 billion
Operating Income: Up 15 percent year-over-year to $888 million
Operating Ratio: An all-time record at 66.3 percent
Click here to read NS’s full earnings report.
Note: Operating ratio is a railroad’s operating expenses expressed as a percentage of operating revenue, and is considered by economists to be the basic measure of carrier profitability. The lower the operating ratio, the more efficient the railroad.
4th Quarter 2016
Net Earnings: $458 million or $0.49 per share, up from $466 million or $0.48 per share in 2015’s 4th quarter
Revenue: Increased by 9 percent to $3,037 billion
Operating Income: Increased to $1 billion over last year’s $791 million
Operating Ratio: 67 percent, an improvement over last year’s 71.6 percent
2016 Annual Earnings
Net Earnings: Decreased to $1.7 billion or $1.81 earnings per share, down from $1.96 billion or $2.00 per share in 2015
Revenue: Decreased to $11.1 billion from $11.8 billion in 2015
Operating Income: Decreased $3.4 billion from $3.6 billion in 2015
Operating Ratio: 69.4 percent
Click here to read CSX’s full earnings report
4th Quarter 2016
Net Earnings: Net income increased by 20 percent to C$3.84 million; diluted earnings per share increased 25 percent to C$2.61 from fourth quarter 2015’s reported C$2.08
Revenue: Decreased 3 percent to C$1.64 billion from C$1.69 billion
Operating Income: Increased 6 percent to C$717 million over fourth quarter 2015’s C$677 million
Operating Ratio: 56.2 percent, a record low
2016 Annual Earnings
Net Earnings: Net income increased by 18 percent to C$1.6 billion from C$1.4 billion; diluted earnings per share increased 27 percent to C$10.63 from C$8.40
Revenue: Decreased 7 percent to C$6.23 billion from 2015’s reported C$6.71 billion
Operating Income: Decreased 4 percent from 2015’s C$2.7 billion to C$2.6 billion
Operating Ratio: 58.6 percent, a record low
Click here to read CP’s full earnings report
4th Quarter 2016
Net Earnings: $1.1 billion or $1.39 per diluted share, an increase of 6 percent
Revenue: Down 1 percent to $5.2 billion
Operating Income: Up 2 percent to $2.0 billion
Operating Ratio: Improved by 1.2 points to 62.0 percent
2016 Annual Earnings
Net Earnings: Decreased by 11 percent to $4.2 billion or 8 percent to $5.07 per diluted share, down from 2015’s reported $4.8 billion or $5.49 per diluted share
Revenue: Decreased to $19.9 billion from $21.8 billion
Operating Income: Decreased by 10 percent to $7.3 billion
Operating Ratio: Increased 0.4 points to 63.5 percent
Click here to read UP’s full earnings report
4th Quarter 2016
Net Earnings: Decreased by 5 percent to $130 million or $1.21 earnings per share
Revenue: Static at $599 million
Operating Income: Decreased by 4 percent to $211 million
Operating Ratio: 64.8 percent, a 1.4 point increase from 2015’s 4th quarter report of 63.4 percent
2016 Annual Earnings
Net Earnings: $480 million or $4.43 per share, down from 2015’s reported $485 million or $4.40 per share
Revenue: Down 3 percent to $2.3 billion
Operating Income: Increased by 2 percent to $819 million
Operating Ratio: 64.9 percent, a 1.9 point improvement over 2015
Click here to read KCS’s full earnings report
4th Quarter 2016
Net Earnings: Increased 8 percent to C$1,018 million; diluted earnings per share increased 12 percent to C$1.32
Revenue: Increased by 2 percent to C$3,217 million
Operating Income: Increased by 3 percent to C$1,395 million
Operating Ratio: 56.6 percent, an improvement of 0.6 points
2016 Annual Earnings
Net Earnings: Increased 3 percent to C$3,640 million; diluted earnings per share rose 6 percent to C$4.67
Revenue: Decreased by 5 percent to C$12,037 million
Operating Income: Increased 1 percent to C$5,312 million
Operating Ratio: Improved 2.3 points to 55.9 percent
Click here to read CN’s full earnings report
4th Quarter 2016
Net Earnings: Increased 15 percent to $416 million; diluted earnings per share increased 18 percent to $1.42
Revenue: Decreased 1 percent to $2.5 billion
Operating Income: Increased 19 percent to $761 million
Operating Ratio: 69.4 percent, a 510 point improvement over 74.5 percent reported for the fourth quarter of 2015
2016 Annual Earnings
Net Earnings: Increased 7 percent to $1.7 billion; diluted earnings per share increased 10 percent to $5.62
Revenue: Decreased by 6 percent to $9.9 billion
Operating Income: Increased 7 percent to $3.1 billion
Operating Ratio: Improved 370 points to 68.9 percent as compared to 2015’s reported 72.6 percent
Click here to read NS’s full earnings report
Note: Operating ratio is a railroad’s operating expenses expressed as a percentage of operating revenue, and is considered by economists to be the basic measure of carrier profitability. The lower the operating ratio, the more efficient the railroad.
Net Earnings: $455 million or $0.48 per share; down from $507 million or $0.52 per share
Revenue: Declined 8 percent
Operating Income: Declined 10 percent to $841 million
Operating Ratio: Increased 70 basis points to 69.0 percent
Click here to read CSX’s full earnings report
Net Earnings: $121 million or $1.12 per diluted share; down from $132 million or $1.20 per diluted share
Revenue: Decreased 4 percent to $605 million
Operating Income: Decreased 9 percent to $200 million
Operating Ratio: Increased to 66.9 percent
Click here to read Kansas City Southern’s full earnings report
Net Earnings: C$347 million (7 percent increase) or C$2.34 diluted earnings per share (a 15 percent increase); up from C$323 million or C$2.04 diluted earnings per share
Revenue: Decrease of 9 percent to C$1.55 billion
Operating Income: C$657 million, a decrease of 13 percent
Operating Ratio: 57.7 percent, lowest ever reported
Click here to read Canadian Pacific’s full earnings report
Net Earnings: $1.1 billion or $1.36 per diluted share (9 percent decline); down from $1.3 billion or $1.50 per diluted share
Revenue: $5.2 billion, down 7 percent
Operating Income: Declined 11 percent to $2.0 billion
Operating Ratio: 62.1 percent, up 1.8 points
Click here to read Union Pacific’s full earnings report
Net Earnings: C$972 million or C$1.25 per diluted share, as compared to 2015 3rd quarter of C$1,007 million or C$1.26 per diluted share
Revenue: Decreased 6 percent to C$3,014 million
Operating Income: Declined 5 percent to C$1,407 million
Operating Ratio: A record 53.3 percent, a 0.5-point improvement
Click here to read Canadian National’s full earnings report
Net Earnings: $460 million (2 percent increase) or $1.55 diluted earnings per share (4 percent increase); up from $452 million or $1.49 diluted earnings per share
Revenue: Declined 7 percent to $2.5 billion
Operating Income: Stayed at a steady $820 million
Operating Ratio: 67.5 percent, a 220 basis point improvement over 2015’s reported 69.7 percent in the third quarter
Click here to read Norfolk Southern’s full earnings report
Note: Operating ratio is a railroad’s operating expenses expressed as a percentage of operating revenue, and is considered by economists to be the basic measure of carrier profitability. The lower the operating ratio, the more efficient the railroad.
Net Earnings: $445 million or $0.47 per share; down from $533 million or $0.56 per share
Revenue: Down 12 percent
Operating Income: Down 17 percent to $840 million
Operating Ratio: Increased 210 basis points to 68.9 percent
Click here to read CSX’s full earnings report.
Net earnings: $120 million or $1.11 diluted earnings per share, a 10 percent increase
Revenue: $569 million, a decrease of 3 percent
Operating Income: $220 million, an 18 percent increase
Operating Ratio: 61.3 percent, improvement of 6.8 points
Click here to read Kansas City Southern’s full earnings report.
Net Earnings: C$328 million or C$2.15 per share, a decline of 16 percent
Revenue: C$1.45 billion, a decrease of 12 percent
Operating Income: C$551 million, a decrease of C$95 million
Operating Ratio: 62 percent, an increase of 110 basis points
Click here to read Canadian Pacific’s full earnings report.
Net Earnings: $1.0 billion or $1.17 per diluted share, a decline of 15 percent
Revenue: $4.8 billion, down 12 percent
Operating Income: $1.7 billion, down 15 percent
Operating Ratio: 65.2 percent, an increase of 1.1 points
Click here to read Union Pacific’s full earnings report.
Net Earnings: Decreased to C$858 million or C$1.10 per diluted share
Revenue: Decreased to C$2,842 million, a 9 percent decrease
Operating Income: C$1,549 million, a 12 percent decline
Operating Ratio: Second quarter record of 54.5 percent, an improvement of 1.9 points
Click here to read Canadian National’s full second quarter earnings report.
Net Earnings: $405 million or $1.36 diluted earnings per share, a decline in net earnings and a 4 percent decline in earnings per share.
Revenue: $2.5 billion, down 10 percent
Operating Income: $770 million, a 5 percent decrease
Operating Ratio: Improved to 68.6 percent, a 140 basis point improvement or 11 percent reduction
Click here to read Norfolk Southern’s full second quarter earnings report.
Note: Operating ratio is a railroad’s operating expenses expressed as a percentage of operating revenue, and is considered by economists to be the basic measure of carrier profitability. The lower the operating ratio, the more efficient the railroad.
According to The Oregonian, a Union Pacific oil train traveling through the Columbia River Gorge derailed and caught fire Friday afternoon. Although no injuries were reported, local schools evacuated students and nearby state highways were shut down.
The train originated from North Dakota and was carrying the volatile Bakken crude oil to Washington state. Eleven of the 96-car train derailed almost 70 miles east of Portland, near the town of Mosier, Ore.
SMART TD Washington State Legislative Director Herb Krohn has been briefed on the accident and was dispatched to the scene. Krohn serves on the Transportation Division Rail Safety Task Force.
Click here to see pictures of the derailment from RT news.
Click here to read more from The Oregonian.
CSX Corporation announced declining financial results for the first quarter 2016. Net earnings for the railroad decreased to $356 million or $0.37 per share, down from first quarter 2015 reported net earnings of $442 million or $0.45 per share.
“As we managed through the impact of the continued coal decline and other market forces during the first quarter, CSX took aggressive actions to improve efficiency, reduce costs and streamline resources across the network to further reshape the company,” CEO Michael J. Ward said.
Revenue for the quarter declined 14 percent, reflecting a lower fuel recovery, a 5 percent volume decline and a $95 million year-over-year decline in other revenue. Expenses also decreased by 12 percent, driven by efficiency gains of $133 million and lower volume-related costs of $64 million. CSX reported a decrease to operating income of $139 million to $704 million. At the same time, the operating ratio increased 90 basis points year-over-year to 73.1 percent.
“While CSX delivered strong efficiency gains in the first quarter, we continue to expect full-year earnings per share to decline in 2016 as a result of ongoing coal headwinds combined with other market fundamentals. At the same time, CSX remains focused on meeting and exceeding customer expectations while driving further efficiency savings to maximize shareholder value and achieve a mid-60s operating ratio longer term.”
Operating ratio is a railroad’s operating expenses expressed as a percentage of operating revenue, and is considered by economists to be the basic measure of carrier profitability. The lower the operating ratio, the more efficient the railroad.
In a press release April 19, Kansas City Southern (KCS) released their first quarter 2016 financial results.
Revenue decreased by 7 percent to $563 million. Operating income increased 5 percent to $188 million. Carload volumes for the quarter were 5 percent lower than in the first quarter 2015. Revenue declined 1 percent.
Operating expenses decreased by 12 percent to $375 million. Operating ratio came in at 66.6 percent, a 2.3 point improvement as compared with the reported 70.5 percent of the first quarter 2015. Diluted earnings per share were $0.99. Adjusted diluted earnings per share were $1.03.
“Despite flooding that shut down key portions of our U.S. rail network for over three weeks, KCS delivered solid earnings and operating results,” said CEO David L. Starling. “That we overcame this very significant challenge while simultaneously scaling costs across the network clearly demonstrates KCS’ ability to react quickly to rapid and unexpected changes to its operating environment.”
Canadian Pacific Railway (CP) announced its lowest-ever first quarter operating ratio of 58.9 percent and diluted earnings per share of C$3.51 (an 83 percent increase from C$1.92) or adjusted diluted earnings per share of C$2.50 (an 11 percent increase from C$2.26) for the first quarter 2016. CP reports that their operating ratio improved 430 basis points year-over-year and for a third straight quarter was below 60 percent. At 58.9 percent, operating ratio is the lowest-ever when compared to adjusted operating ratios in previous quarters, CP said.
“The precision railroading model works in all economic environments,” said CP CEO E. Hunter Harrison. “Despite weakness in the economy and volume headwinds, we focused on what we can control – our costs and our commitment to providing reliable service – and delivered a record performance.”
Revenues for the railroad were down 4 percent to C$1.59 billion from 2015’s first quarter revenues of C$1.67 billion. Operating income increased 7 percent to C$653 million from C$612 million. Net income rose 69 percent to C$540 million from C$320 million. Adjusted income was up 2 percent to C$384 million from the reported C$375 million of the first quarter last year.
“I am proud of what the team continues to produce quarter after quarter in these difficult times and we remain optimistic in our outlook given signs of stabilization within the Canadian economy and in key global markets,” Harrison said. “As market conditions improve and volumes increase, our team of professional railroaders will be ready. Furthermore, we are confident in our plan to deliver shareholder value, which includes the announcement of a new share repurchase program that demonstrates our continued confidence over the long-term.”
Union Pacific Corporation (UP) reported declines in first quarter 2016 revenues.
Operating revenue was down 14 percent to $4.8 billion. The railroad reported a first quarter net income of nearly $1.0 billion or $1.16 per diluted share, down 11 percent as compared to last year’s first quarter of $1.2 billion or $1.30 per diluted share. Operating income was down 15 percent to $1.7 billion and operating ratio went up 0.3 points to 65.1 percent.
“In this challenging environment, we have continued our intense focus on operating safely and efficiently, managing our resources, and improving our customer experience,” said CEO Lance Fritz. “As a result, the quarterly operating ratio came in at 65.1 percent, up only 0.3 points from last year, as solid core pricing and productivity improvements helped to offset an 8 percent decline in total volumes.”
Norfolk Southern Corporation (NS) announced strong financial results for the first quarter 2016.
Income from railway operations was up 19 percent to $723 million; while net income also saw a 25 percent increase to $387 million as compared to last year’s first quarter reported $310 million. NS reported that a first quarter record was set for operating ratio, which came in at 70.1 percent. Diluted earnings per share were $1.29, up 29 percent as compared with the reported diluted earnings per share of $1.00 for the first quarter 2015.
Railway operating revenues fell 6 percent to $2.4 billion, while operating expenses also decreased 13 percent to $1.7 billion.
“Our strong first-quarter results demonstrate the significant progress we are making in line with our strategic plan,” said CEO James A. Squires. “Since I became CEO in June, our team has been committed to streamlining operations, reducing expenses and maintaining superior customer service levels. Our focus on strengthening Norfolk Southern is yielding results, and the company is now on track to achieve productivity savings of about $200 million and an operating ratio below 70 in 2016.”
NS is implementing a strategic plan to reduce costs, drive profitability and enhance value for all NS shareholders. Through this plan, NS expects to achieve annual productivity savings of more than $650 million by 2020 and an operating ratio below 65 percent by 2020.
Canadian National Railway (CN) announced mostly positive financial results for the first quarter 2016.
The railway reported a 13 percent increase in net income to C$792 million, while diluted earnings per share increased 16 percent to C$1.00. Operating income also increased 14 percent to C$1,217 million. CN reported a decrease in revenues by 4 percent to C$2,964 million. Carloadings declined 7 percent and revenue ton-miles also declined 9 percent. Operating expenses saw a decline of 14 percent to C$1,747 million. Operating ratio improved 6.8 points to 58.9 percent.
CEO Claude Mongeau said, “CN delivered a very solid quarterly performance in a challenging economic environment. We successfully aligned our resources with the reduced volume level to achieve strong efficiency gains, while continuing to offer superior customer service and significantly improving our safety performance. These achievements allowed the CN team to deliver record first-quarter financial results.”
CSX Corporation announced a solid fourth quarter and full-year financial performance for 2015. The railroad announced declines for the fourth quarter and mixed financial results for the full year.
CSX reported in a press conference that net earnings declined five percent to $466 million or $0.48 per share (down two percent), down from last year’s fourth quarter net earnings of $491 million or $0.49 per share.
Fourth quarter revenue declined 13 percent, as a result of a six percent volume decline and the impact of lower fuel recovery. CSX reported that expenses decreased 13 percent; reflecting reduced fuel prices, lower volume-related costs and efficiency gains. As a result, operating income declined for the quarter by 12 percent to $791 million, while operating ratio improved 20 basis points to 71.6 percent.
For the full year 2015, CSX generated $11.8 billion in revenue as growth in intermodal, automatic and minerals markets partially offset continued significant declines in coal. The company reports a four percent increase of earnings per share to $2.00 on net earnings of $2.0 billion. CSX said that improving service, resource alignment and efficiency gains helped generate an operating income of nearly $3.6 billion and the company’s first sub-70 full-year operating ratio at 69.7 percent.
“CSX delivered solid results in 2015 by balancing strong service with compelling cost control and efficiency gains despite a market challenged by low commodity prices and global impacts of the strong U.S. dollar,” CEO Michael J. Ward said.
“With negative global and industrial market trends projected for 2016, full-year earnings per share are expected to be down compared to 2015. CSX will continue to be rigorous about efficiency, resources and service quality in order to maximize shareholder value and achieve a mid-60s operating ratio longer term.”
Operating ratio is a railroad’s operating expenses expressed as a percentage of operating revenue, and is considered by economists to be the basic measure of carrier profitability. The lower the operating ratio, the more efficient the railroad.
Canadian Pacific Railway announced record fourth quarter and full-year earnings for 2015.
The fourth quarter saw the highest ever diluted earnings per share for the period at C$2.08 and adjusted diluted earnings per share of $2.72. Adjusted and reported operating ratio came in at 59.8 percent, matching the record-setting performance of 2014.
For the full-year 2015, CP announced diluted earnings per share at C$8.40 and adjusted diluted earnings per share at a record C$10.10, a 19 percent improvement over last year’s reported adjusted earnings per share of C$8.40. The railroad posted a best-ever full-year adjusted and reported operating ratio of 61 and 60 percent, beating the previous record set in 2014 at 370 and 470 basis points respectively. CP also reported record revenues of C$6.71 billion for the year.
“Thanks to our committed, hard-working employees across the network we have produced a record low operating ratio along with record earnings per share,” CEO E. Hunter Harrison said. “Despite challenging economic conditions and lower commodity prices, we continue to focus on what we can control – lowering costs, creating efficiencies and improving service.
“While the North American economy braces itself for more headwinds, we remain optimistic about the future and CP’s continued growth. Despite the challenges, we expect 2016 to bring an operating ratio below 59 while generating double-digit EPS (earnings per share) growth – a testament to the strength of our operating model and plan for the future.”
Union Pacific Corporation reported decreases in revenues for the fourth quarter and full-year 2015.
UP reported a fourth quarter net income of $1.1 billion or diluted earnings per share of $1.31, a 19 percent decline as compared to last year’s fourth quarter of $1.4 billion or $1.61 per diluted share. Similarly, operating revenue was down 15 percent to $5.2 billion and business volumes as measured by total revenue carloads declined nine percent. Operating ratio came in at 63.2 percent, unfavorable by 1.8 points as compared to last year’s fourth quarter.
“Total volumes decreased nine percent in the quarter, more than offsetting another quarter of solid core pricing gains,” CEO Lance Fritz said. “On the cost side, we continued to adjust resources throughout the quarter and also made solid progress with our productivity initiatives. As a result of these efforts, we achieved a quarterly operating ratio of 63.2 percent.”
For the full year 2015, UP reported net income of $4.8 billion or $5.49 per diluted share, down eight and five percent respectively as compared to 2014’s reported net income of $5.2 billion or $5.75 per diluted share. Operating revenue also saw a decrease, coming in at $21.8 billion, as compared to 2014’s reported $24.0 billion. Operating income saw an eight percent decrease to $8.1 billion. Carloadings were down six percent for the year. UP reported an operating ratio of 63.1 percent, a full-year record, improving 0.4 points from the previous year.
“This past year was a difficult one in many respects, but our team did outstanding work in the face of dramatic declines in volumes, and shifts in our business mix,” Fritz said. “Overall economic conditions, uncertainty in the energy markets, commodity prices, and the strength of the U.S. dollar will continue to have a major impact on our business this year. However, we are well-positioned to efficiently serve customers in existing markets as they rebound.
“The strength and diversity of the Union Pacific franchise also will provide tremendous opportunities for new business development as both domestic and global markets evolve. When combined with our unrelenting focus on safety, productivity and service, these opportunities will translate into an excellent experience for our customers and strong value for our shareholders in the years ahead.”
Kansas City Southern reported decreases in earnings for the fourth quarter 2015. Revenue for the railroad decreased for the fourth quarter by seven percent to $598 million as compared to the fourth quarter of 2014.
The railroad also saw a decrease in carload volumes (down two percent). Operating expenses declined 12 percent to $379 million, a three percent decrease from last year’s fourth quarter. Operating income surged two percent to $219 million, as compared to last year’s reported $214 million. Operating ratio saw a 3.3 point improvement to 63.4 percent. Net income declined to $140 million or $1.28 per diluted share as compared to the reported $142 million or $1.28 per diluted share from the fourth quarter 2014. Adjusted diluted earnings per share came in at $1.23 as compared to $1.27 in 2014.
“KCS’ ability to react to a rapidly changing market and operational conditions was clearly evidenced during the fourth quarter in which not only did the company have to contend with an unsettled economy, but also with a hurri
cane in Mexico and floods in a key section of its U.S. rail network,” CEO David L. Starling said. “Despite these challenges, KCS attained a fourth quarter 2015 operating ratio of 63.4 percent, a 3.3 point improvement from the prior year. System velocity and system dwell metrics also improved, returning KCS to the top tier of Class I railroads in these categories.”
For the full year 2015, KCS reported a decline in revenue of six percent to $2.4 billion. Carloads decreased three percent from 2014, to 2.2 million. KCS reported an operating income for the year at $813 million. Full-year 2015 adjusted operating income decreased four percent from the prior year. Operating ratio saw a slight improvement of 0.7 points to 66.4 percent as compared to last year’s 67.1 percent. Reported net income for the railroad totaled $485 million or $4.40 per diluted share, as compared with 2014’s reported $504 million or $4.55 per diluted share. Adjusted diluted earnings per share came in at $4.49 as compared to the reported $4.82 adjusted diluted earnings per share in 2014.
“Though our industry still must contend with economic uncertainty in 2016, the progress we have made during 2015 gives us confidence that KCS is positioned to maximize its near-term and longer-term business opportunities,” Starling said.
Canadian National Railway reported mixed financial results for the fourth quarter and full-year 2015.
For the fourth quarter, net income increased 11 percent to C$941 million, while diluted earnings per share increased 15 percent to C$1.18. Operating income increased seven percent to C$1,354 million. Revenues for the quarter saw a one percent decrease to C$3,166 million and carloadings declined eight percent and revenue ton-miles declined by five percent. Operating ratio improved 3.5 points to 57.2 percent.
For the full-year 2015, the railway saw a net income increase of 12 percent to C$3,538 million, with diluted earnings per share rising 14 percent to C$4.39. Adjusted net income saw an increase of 16 percent to C$3,580 million; whiled adjusted diluted earnings per share increased 18 percent to C$4.44. Operating income also saw an increase and rose 14 percent to C$5,266 million. Revenues increased four percent to C$12,611 million for the year, while carloadings declined two percent and revenue ton-miles decreased three percent. The operating ratio for 2015 improved by 3.7 points to 58.2 percent. Free cash flow came in at a record C$2,373 million, compared to 2014’s C$2,220 million.
“CN generated strong fourth quarter and full-year 2015 results despite the weak volume environment,” CEO Claude Mongeau said. “Our solid performance is a testament to the strength of CN’s franchise and diversified portfolio of businesses. I am particularly proud that CN’s team of railroaders quickly recalibrated resources to respond to weaker volumes, while protecting customer service.
“Although the economic environment remains challenging, CN will continue to leverage its franchise strength and industry-leading efficiency. For 2016, the company expects to deliver mid-single digit EPS [earnings per share] growth over adjusted diluted 2015 EPS of C$4.44. CN will continue to invest in the safety and efficiency of its network, with a 2016 capital investment program of approximately C$2.9 billion, including the negative impact of foreign exchange and increased spending for Positive Train Control technology.
“Given CN’s strong balance sheet and solid financial prospects, I am pleased to announce that the company’s board of directors approved a 20 percent increase in CN’s 2016 quarterly common-share dividend. CN has increased its dividend per share by 17 percent per year on average since its privatization in 1995 and continues to move towards a target payout ratio of 35 percent.”
Norfolk Southern Corporation reported declining financial results for both the fourth quarter and full-year 2015 as compared to the same periods in 2014.
Railway operating revenues declined 12 percent to $2.5 billion for the fourth quarter 2015. On the same token, traffic volumes also decreased by six percent as a result of lower coal volumes and the effects of low commodity prices.
Railway operating expenses decreased by $103 million, or five percent, to $1.9 billion. Income from railway operations was 28 percent lower for the quarter, coming in at $642 million. The operating ratio or operating expenses as a percentage of revenues, was 74.5 percent, as compared to last year’s reported 69 percent for the fourth quarter. Fourth quarter 2015 net income was $361 million or $1.20 per diluted share, a decrease from last year’s $511 million or $1.64 per diluted share.
Full year financials for 2015, like the fourth quarter, also saw declines. Railway operating revenues were $10.5 billion, a 10 percent decrease as compared to 2014. This reflects an $852 million or 64 percent reduction in fuel surcharge revenues. Traffic volume was also down three percent due to declines in coal. Railway operating expenses declined $422 million or five percent to $7.6 billion. Income from railway operations declined 19 percent to $2.9 billion. Operating ratio for the year was 72.6 percent, compared to 69.2 percent from the prior year. For 2015, net income was $1.6 billion or $5.10 per diluted share, as compared to 2014’s $2.0 billion or $6.39 per diluted share.
“We are implementing a plan to reduce costs and enhance profitable growth,” CEO James A. Squires said. This plan will enable us to achieve significant annual expense savings beginning in 2016 without compromising the company’s ability to capitalize on volume and revenue growth opportunities. We are making progress despite a challenging operating environment, including successfully restoring our rail service to previous high levels, realigning resources and completing strategic capacity investments to improve efficiency and productivity.
“Through these actions, we are positioning Norfolk Southern for improved performance and value creation in 2016 and beyond. We are confident in our ability to deliver superior shareholder value through our strategic plan, which is built on exceptional customer service, growth through pricing and new business, cost reduction and control, and increasing returns to capital. Our fourth-quarter results reflect current challenges in domestic and global markets.”
The Hutchinson News reported that a recently released NTSB investigation report indicates that UP contributed to the ‘probable cause’ of the 2014 collision of two UP freight trains near Galva, Kan.
Read the complete article here.
CHICAGO — The Federal Railroad Administration told SMART Transportation Division it has filed a violation against the Union Pacific Railroad in response to a union complaint that the railroad ordered a train crew to work outside its assigned territory while being piloted by a manager who was not qualified on the physical characteristics of the territory.
FRA Region IV Administrator Steve Illich informed SMART TD Illinois Legislative Director Robert W. Guy of the agency’s action in a letter dated October 27.
The incident under investigation by the FRA was reported to the Illinois Legislative Board by a member of the crew of a Bloomington-based local assigned to UP’s Springfield Subdivision.
Although the southern boundary of the territory for which the crew was qualified ends at Milepost 222, Carlinville, Ill., the May 28 job was ordered to retrieve some maintenance-of-way equipment spotted at milepost 234 near Shipman, Ill., 12 miles further south in territory over which none of the crew members were qualified.
“The standard procedure in such cases is to supply the crew with a pilot, normally a fellow transportation employee, who is qualified over the territory,” Guy said.
“But it turned out the UP manager assigned as pilot wasn’t qualified on that territory either,” Guy said. “In fact, he had never been over that track on a moving train, and he not only admitted his lack of qualification but claimed it wasn’t important.”
In his report to the SMART TD Illinois State Legislative Board, the conductor said that he and the engineer, “made it very clear that we were not comfortable having a pilot that he himself [admitted] was not qualified on the territory. His reply was that it was CTC, how hard could it be?”
The conductor asked the manager whether he had a copy of the work orders for the assignment. The manager allegedly replied that all he needed to know was that the ballast undercutter, two flat cars and two hopper cars of ballast were restricted to 25 miles-per-hour.
“The only paperwork I saw was that he had a timetable,” the conductor told the legislative board.
Guy said the crew handled the incident in exactly the right way.
“They notified the manager pilot that they weren’t comfortable,” Guy said. “Then once their tour was over they documented the incident and forwarded the details to local SMART TD officers for handling.”
“The FRA investigator in charge even noted the accuracy of the crew members’ statements regarding the manager pilot,” Guy said. “Once confronted, another UP manager stated that the pilot was not qualified on that segment of track.”
Guy also said he was “appalled” by the cavalier attitude of the manager pilot as witnessed by the crew involved in the May 28 incident.
“It’s not just that this official violated Part 240.231 of Section 49 of the Code of Federal Regulations,” Guy said. “It’s that he did it in such a flagrant and dismissive manner.”
Guy said the manager’s attitude is even more inappropriate in view of the territory where his violation occurred.
“The UP main line between Joliet and Alton has been one continual construction zone so it can be upgraded for 110-mph Amtrak service,” Guy said.
“This territory is full of equipment and manpower, and the track and bridge work migrates to different locations every day,” Guy said.
“Slow orders, Form Bs and other notices related to train movements can be issued and abolished quickly, which is why a crew unfamiliar with the track needs a pilot who knows not only the geography of the alignment but the way the railroad is using it from moment to moment.
“If a train crew is not familiar with the pilot assigned to their job, they should always question the qualifications of that pilot to determine if in fact the person is suitable to serve in that capacity.”