Return on Equity (ROE)
since 2005
Calculation
Norfolk Southern Corp., ROE, long-term trends, calculation
| ROE | = | 100 | × | Net income1 | ÷ | Stockholders’ equity1 | |
|---|---|---|---|---|---|---|---|
| Dec 31, 2021 | 22.03% | = | 100 | × | 3,005) | ÷ | 13,641) |
| Dec 31, 2020 | 13.61% | = | 100 | × | 2,013) | ÷ | 14,791) |
| Dec 31, 2019 | 17.93% | = | 100 | × | 2,722) | ÷ | 15,184) |
| Dec 31, 2018 | 17.35% | = | 100 | × | 2,666) | ÷ | 15,362) |
| Dec 31, 2017 | 33.03% | = | 100 | × | 5,404) | ÷ | 16,359) |
| Dec 31, 2016 | 13.44% | = | 100 | × | 1,668) | ÷ | 12,409) |
| Dec 31, 2015 | 12.77% | = | 100 | × | 1,556) | ÷ | 12,188) |
| Dec 31, 2014 | 16.12% | = | 100 | × | 2,000) | ÷ | 12,408) |
| Dec 31, 2013 | 16.92% | = | 100 | × | 1,910) | ÷ | 11,289) |
| Dec 31, 2012 | 17.92% | = | 100 | × | 1,749) | ÷ | 9,760) |
| Dec 31, 2011 | 19.33% | = | 100 | × | 1,916) | ÷ | 9,911) |
| Dec 31, 2010 | 14.02% | = | 100 | × | 1,496) | ÷ | 10,669) |
| Dec 31, 2009 | 9.99% | = | 100 | × | 1,034) | ÷ | 10,353) |
| Dec 31, 2008 | 17.86% | = | 100 | × | 1,716) | ÷ | 9,607) |
| Dec 31, 2007 | 15.05% | = | 100 | × | 1,464) | ÷ | 9,727) |
| Dec 31, 2006 | 15.40% | = | 100 | × | 1,481) | ÷ | 9,615) |
| Dec 31, 2005 | 13.79% | = | 100 | × | 1,281) | ÷ | 9,289) |
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), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31), 10-K (reporting date: 2010-12-31), 10-K (reporting date: 2009-12-31), 10-K (reporting date: 2008-12-31), 10-K (reporting date: 2007-12-31), 10-K (reporting date: 2006-12-31), 10-K (reporting date: 2005-12-31).
1 US$ in millions
The financial performance from 2005 to 2021 is characterized by a general upward trend in profitability, although Return on Equity (ROE) experienced significant volatility over the seventeen-year period. While the ROE maintained a baseline typically between 13% and 19%, several distinct anomalies and cycles are evident in the financial trajectory.
- Net Income Trends
- Net income grew from $1,281 million in 2005 to $3,005 million in 2021. This growth was not linear, as evidenced by a notable contraction in 2009 to $1,034 million and a significant, isolated peak in 2017 reaching $5,404 million. Following the 2017 peak, earnings normalized before trending upward again toward the end of the period.
- Stockholders' Equity Evolution
- Equity demonstrated a steady increase for the first decade, rising from $9,289 million in 2005 to a peak of $16,359 million in 2017. However, a reversal is observed after 2017, with equity steadily declining to $13,641 million by 2021, suggesting an increase in capital distributions or share repurchases.
- Return on Equity (ROE) Analysis
- The ROE exhibited three primary phases. First, a period of volatility surrounding the 2008-2009 economic downturn, where ROE dropped to its lowest point of 9.99%. Second, a period of relative stability from 2010 to 2016, where the ratio generally oscillated between 12.77% and 19.33%. Third, an anomalous spike in 2017 to 33.03%, driven by the surge in net income. By 2021, the ROE reached 22.03%, a result of the combined effect of rising net income and a reduced equity base.
Overall, the data indicates that while net income is the primary driver of ROE fluctuations, the strategic reduction of stockholders' equity in the latter years contributed to the expansion of the return ratio in 2021.
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Comparison to Competitors
Norfolk Southern Corp., ROE, long-term trends, comparison to competitors
| Norfolk Southern Corp. | FedEx Corp. | Uber Technologies Inc. | Union Pacific Corp. | United Airlines Holdings Inc. | United Parcel Service Inc. | |
|---|---|---|---|---|---|---|
| Dec 31, 2021 | 22.03% | 21.64% | -3.43% | 46.06% | -39.05% | 90.44% |
| Dec 31, 2020 | 13.61% | 7.03% | -55.18% | 31.54% | -118.61% | 204.41% |
| Dec 31, 2019 | 17.93% | 3.04% | -59.94% | 32.65% | 26.09% | 135.90% |
| Dec 31, 2018 | 17.35% | 23.55% | — | 29.21% | 21.30% | 158.59% |
| Dec 31, 2017 | 33.03% | 18.65% | — | 43.10% | 24.20% | 491.00% |
| Dec 31, 2016 | 13.44% | 13.20% | — | 21.24% | 26.13% | 847.16% |
| Dec 31, 2015 | 12.77% | 7.00% | — | 23.05% | 81.86% | 196.11% |
| Dec 31, 2014 | 16.12% | 13.73% | — | 24.45% | 47.25% | 141.62% |
| Dec 31, 2013 | 16.92% | 8.97% | — | 20.67% | 19.14% | 67.53% |
| Dec 31, 2012 | 17.92% | 13.80% | — | 19.84% | -150.31% | 17.34% |
| Dec 31, 2011 | 19.33% | 9.54% | — | 17.72% | 46.51% | 54.07% |
| Dec 31, 2010 | 14.02% | 8.57% | — | 15.65% | 14.65% | 43.71% |
| Dec 31, 2009 | 9.99% | 0.72% | — | 11.20% | — | 28.20% |
| Dec 31, 2008 | 17.86% | 7.74% | — | 15.14% | — | 44.29% |
| Dec 31, 2007 | 15.05% | 15.93% | — | 11.90% | 16.67% | 3.14% |
| Dec 31, 2006 | 15.40% | 15.69% | — | 10.49% | 1,064.99% | 27.14% |
| Dec 31, 2005 | 13.79% | 15.11% | — | 7.49% | — | 22.92% |
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), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31), 10-K (reporting date: 2010-12-31), 10-K (reporting date: 2009-12-31), 10-K (reporting date: 2008-12-31), 10-K (reporting date: 2007-12-31), 10-K (reporting date: 2006-12-31), 10-K (reporting date: 2005-12-31).
Comparison to Sector (Transportation)
Norfolk Southern Corp., ROE, long-term trends, comparison to sector (transportation)
| Norfolk Southern Corp. | Transportation | |
|---|---|---|
| Dec 31, 2021 | 22.03% | 30.78% |
| Dec 31, 2020 | 13.61% | -10.82% |
| Dec 31, 2019 | 17.93% | 8.33% |
| Dec 31, 2018 | 17.35% | 33.03% |
| Dec 31, 2017 | 33.03% | 40.90% |
| Dec 31, 2016 | 13.44% | 27.46% |
| Dec 31, 2015 | 12.77% | 38.20% |
| Dec 31, 2014 | 16.12% | 27.90% |
| Dec 31, 2013 | 16.92% | 22.65% |
| Dec 31, 2012 | 17.92% | 15.25% |
| Dec 31, 2011 | 19.33% | 22.02% |
| Dec 31, 2010 | 14.02% | 18.67% |
| Dec 31, 2009 | 9.99% | 9.88% |
| Dec 31, 2008 | 17.86% | 3.26% |
| Dec 31, 2007 | 15.05% | 10.87% |
| Dec 31, 2006 | 15.40% | 68.59% |
| Dec 31, 2005 | 13.79% | -101.45% |
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), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31), 10-K (reporting date: 2010-12-31), 10-K (reporting date: 2009-12-31), 10-K (reporting date: 2008-12-31), 10-K (reporting date: 2007-12-31), 10-K (reporting date: 2006-12-31), 10-K (reporting date: 2005-12-31).
Comparison to Industry (Industrials)
Norfolk Southern Corp., ROE, long-term trends, comparison to industry (industrials)
| Norfolk Southern Corp. | Industrials | |
|---|---|---|
| Dec 31, 2021 | 22.03% | 15.38% |
| Dec 31, 2020 | 13.61% | 0.24% |
| Dec 31, 2019 | 17.93% | 14.56% |
| Dec 31, 2018 | 17.35% | 17.95% |
| Dec 31, 2017 | 33.03% | 18.24% |
| Dec 31, 2016 | 13.44% | 21.69% |
| Dec 31, 2015 | 12.77% | 16.11% |
| Dec 31, 2014 | 16.12% | 19.68% |
| Dec 31, 2013 | 16.92% | 16.40% |
| Dec 31, 2012 | 17.92% | 17.20% |
| Dec 31, 2011 | 19.33% | 20.10% |
| Dec 31, 2010 | 14.02% | 16.41% |
| Dec 31, 2009 | 9.99% | 12.84% |
| Dec 31, 2008 | 17.86% | 20.74% |
| Dec 31, 2007 | 15.05% | 20.36% |
| Dec 31, 2006 | 15.40% | 32.16% |
| Dec 31, 2005 | 13.79% | 7.80% |
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), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31), 10-K (reporting date: 2010-12-31), 10-K (reporting date: 2009-12-31), 10-K (reporting date: 2008-12-31), 10-K (reporting date: 2007-12-31), 10-K (reporting date: 2006-12-31), 10-K (reporting date: 2005-12-31).