"We achieved 3% higher revenue compared to the prior year, and adjusted earnings per share was 23% higher than the third quarter last year. Importantly, we delivered 570 basis points of adjusted OR improvement, bringing that ratio down to 63.4%"
— Mark George
03Detailed Report
NSC
Company NSC
Period
Q3 2024
CurrencyUSD
Report TypeQuarterly Earnings
GeneratedJun 25, 2026
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Executive Summary
Norfolk Southern (NSC) delivered a robust QQ3 2024 through a combination of volume growth, targeted cost reductions, and network resiliency. Revenue rose 3% year-over-year to $3.051 billion, driven by 7% volume growth across segments, while revenue per unit (RPU) narrowed due to fuel surcharges, coal price declines, and intermodal mix effects. Importantly, adjusted operating ratio (OR) improved by 570 basis points versus the prior year, landing at 63.4% for the period, underscoring the efficacy of the company’s PSR 2.0 initiative and productivity programs. Management highlighted the benefits of a safer, more efficient network—bolstered by a 13% year-over-year increase in car velocity and a 18% improvement in locomotive productivity—that supported higher margins even as the environment featured Hurricanes Helene and Milton and a port disruption.
Key Performance Indicators
Revenue
Increasing
3.05B
QoQ: 0.23% | YoY: 2.69%
Gross Profit
Decreasing
1.21B
39.76% margin
QoQ: 9.97% | YoY: -16.34%
Operating Income
Increasing
1.60B
QoQ: 44.70% | YoY: 111.11%
Net Income
Increasing
1.10B
QoQ: 49.12% | YoY: 129.92%
EPS
Increasing
4.86
QoQ: 49.08% | YoY: 130.33%
Revenue Trend
Margin Analysis
Financial Highlights
Revenue: $3.051B, up 3% YoY; QoQ up 0.23% (Q2 to Q3). Gross profit: $1.213B; gross margin 39.8% (0.398). Operating income: $1.596B; operating margin 52.3% (0.523). Net income: $1.099B; net margin 36.0% (0.360). EPS: $4.86 (diluted $4.85). EBITDA: $1.969B; EBITDA margin ~64.5% (0.645). Adjusted OR: 63.4% (up 570 bps YoY; down from prior quarters). Revenue growth drivers included 7% volume growth across segments; Intermodal revenue up 4% YoY with 9% volume growth; Coal revenue down 2% YoY with 11% volume growth but weaker RPU. Free cash flow: $645M; Operating cash flow: $1.226B; Capital expenditures: $581M; Cash at year-end: $975M; Net debt: $16.224B; Total debt: $17.199B; Total assets: $43.255B; Current ratio: 0.732; Quick ratio: 0.653; Dividend yield: 0.54%; P/E: 12.79; P/B: 4.08; EV multiple: ~36.8.
Income Statement
Metric
Value
YoY Change
QoQ Change
Revenue
3.05B
2.69%
0.23%
Gross Profit
1.21B
-16.34%
9.97%
Operating Income
1.60B
111.11%
44.70%
Net Income
1.10B
129.92%
49.12%
EPS
4.86
130.33%
49.08%
Key Financial Ratios
Gross Profit Margin
Fair
39.80%
Gross profit margin is moderate, room for improvement in cost management
Operating Profit Margin
Excellent
52.30%
Operating margin is exceptional, indicating strong pricing power and operational efficiency
Net Profit Margin
Excellent
36.00%
Net profit margin is exceptional, indicating strong pricing power and operational efficiency
Return on Assets
Weak
2.54%
Return on assets suggests inefficient capital allocation
Return on Equity
Fair
7.97%
Return on equity is acceptable but below top-tier companies
Current Ratio
Concern
0.73
Current ratio below safe levels, potential liquidity risk
Debt to Equity
High Risk
1.25
Debt-to-equity indicates high leverage and elevated financial risk
P/E Ratio
Value
12.79x
P/E ratio suggests potential undervaluation or stable earnings
Price to Book
Premium
4.08x
Trading at premium to book value, reflects strong intangibles or growth
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