Norfolk Southern Corporation (NSC) has reported a 15.24 percent rise in profit for the quarter ended Dec. 31, 2016. The company has earned $416 million, or $1.42 a share in the quarter, compared with $361 million, or $1.20 a share for the same period last year. Revenue during the quarter went down marginally by 1.11 percent to $2,490 million from $2,518 million in the previous year period. Gross margin for the quarter expanded 136 basis points over the previous year period to 76.18 percent. Total expenses were 69.44 percent of quarterly revenues, down from 74.50 percent for the same period last year. This has led to an improvement of 507 basis points in operating margin to 30.56 percent.
Operating income for the quarter was $761 million, compared with $642 million in the previous year period.
"2016 was a pivotal year as Norfolk Southern began implementing its new Strategic Plan. We delivered $250 million of productivity savings and recorded our best ever operating ratio, notwithstanding challenging business conditions," said James A. Squires, Norfolk Southern chairman, president and chief executive officer. "With the dedication and support of Norfolk Southern’s talented employees, we improved service for customers while positioning the company for further growth in 2017 and beyond. We are poised to continue building on our success and deliver an additional $100 million of productivity savings in 2017 on the way to our goal of $650 million of annual savings by 2020. We remain steadfast in our commitment to delivering superior shareholder value through the execution of our Strategic Plan."
Operating cash flow improves marginally
Norfolk Southern Corporation has generated cash of $3,034 million from operating activities during the year, up 4.33 percent or $126 million, when compared with the last year. The company has spent $1,832 million cash to meet investing activities during the year as against cash outgo of $2,087 million in the last year. It has incurred net capital expenditure of $1,757 million on net basis during the year, down 24.33 percent or $565 million from year ago.
The company has spent $1,347 million cash to carry out financing activities during the year as against cash outgo of $693 million in the last year period.
Cash and cash equivalents stood at $956 million as on Dec. 31, 2016, down 13.17 percent or $145 million from $1,101 million on Dec. 31, 2015.
Debt moves up marginally
Norfolk Southern Corporation has witnessed an increase in total debt over the last one year. It stood at $10,212 million as on Dec. 31, 2016, up 1.18 percent or $119 million from $10,093 million on Dec. 31, 2015. Total debt was 29.27 percent of total assets as on Dec. 31, 2016, compared with 29.46 percent on Dec. 31, 2015. Debt to equity ratio was almost stable at 0.82 as on Dec. 31, 2016, when compared with the last year. Interest coverage ratio improved to 5.36 for the quarter from 4.52 for the same period last year.
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