Stock Analysis on Net
Stock Analysis on Net

Norfolk Southern Corp. (NYSE:NSC)

This company has been moved to the archive! The financial data has not been updated since April 27, 2022.

Common-Size Income Statement

Norfolk Southern Corp., common-size consolidated income statement

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12 months ended: Dec 31, 2021 Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017
Railway operating revenues 100.00 100.00 100.00 100.00 100.00
Purchased services and rents -15.49 -17.23 -15.27 -15.10 -13.40
Fuel -7.17 -5.47 -8.44 -9.49 -7.96
Cost of railway operating revenues -22.66% -22.70% -23.71% -24.59% -21.36%
Gross profit 77.34% 77.30% 76.29% 75.41% 78.64%
Compensation and benefits -21.92 -24.24 -24.35 -25.53 -27.63
Depreciation -10.60 -11.79 -10.07 -9.62 -10.00
Materials and other -4.91 -6.67 -6.55 -5.72 -7.02
Loss on asset disposal 0.00 -3.93 0.00 0.00 0.00
Income from railway operations 39.91% 30.67% 35.31% 34.55% 33.99%
Pension and other postretirement benefits 0.92 0.93 0.56 0.53 0.00
COLI, net 0.15 0.87 0.61 -0.09 0.31
Other -0.38 -0.23 -0.23 0.14 0.56
Other income, net 0.69% 1.56% 0.94% 0.58% 0.87%
Interest expense on debt -5.80 -6.38 -5.35 -4.86 -5.21
Income before income taxes 34.81% 25.85% 30.90% 30.28% 29.65%
Income taxes -7.84 -5.28 -6.81 -7.01 21.57
Net income 26.97% 20.56% 24.10% 23.27% 51.22%

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

The financial performance from 2017 to 2021 exhibits a general trend of improving operational efficiency, despite periodic volatility in fuel costs and a notable disruption in 2020. While gross profit margins remained relatively stable, the expansion of operating income in 2021 suggests a successful reduction in fixed cost burdens relative to revenue.

Operating Cost Trends
Gross profit margins fluctuated within a tight range, starting at 78.64% in 2017 and ending at 77.34% in 2021. This stability is contrasted by volatility in underlying costs. Purchased services and rents saw an increase from -13.40% in 2017 to a peak of -17.23% in 2020 before moderating to -15.49% in 2021. Fuel costs exhibited significant variance, peaking at -9.49% in 2018 and reaching a low of -5.47% in 2020, reflecting the sensitivity of the cost structure to external energy market fluctuations.
Operational Efficiency and Operating Income
A consistent downward trend is observed in compensation and benefits, which declined from -27.63% of revenues in 2017 to -21.92% in 2021, indicating improved labor productivity or effective cost management. Depreciation remained relatively constant, averaging approximately 10% to 11% of revenues. Income from railway operations reached its highest point in 2021 at 39.91%, recovering from a dip to 30.67% in 2020, the latter of which was impacted by a one-time loss on asset disposal totaling -3.93% of revenues.
Financial Obligations and Net Profitability
Interest expense on debt remained stable as a percentage of revenue, oscillating between -4.86% and -6.38% throughout the period. Income before taxes peaked in 2021 at 34.81%. A significant anomaly is observed in the 2017 tax reporting, where income taxes appear as a positive 21.57%, resulting in an atypically high net income of 51.22% for that year. From 2018 to 2021, tax expenses normalized between -5.28% and -7.84%, with net income stabilizing between 20.56% and 26.97% of railway operating revenues.

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