Operating revenue was $2.5 billion for the quarter, compared with $2.8 billion in the third quarter of 2019. Of that, coal revenue was $250 million, compared with $403 million a year ago.
Meanwhile, merchandise revenue was nearly $1.6 billion, down 10% from $1.7 billion in the third quarter of 2019. Intermodal revenue fell 1% year-over-year to $700 million.
Third-quarter volumes fell 7% year-over-year, while revenue per unit slipped 5%.
The company reported a net income of $569 million, $2.22 per diluted share, in the third quarter, compared with $657 million, or $2.49 per diluted share, a year ago.
But its adjusted third-quarter net income was down by only 2% to $643 million, or $2.51 per diluted share. The adjusted figure accounts for an impairment charge of $99 million, which helped to lower third-quarter operating expenses from $1.67 billion to $1.57 billion. The impairment charge is related to the carrying value of an equity method investment, Norfolk Southern (NS) said.
Operating expenses in the third quarter of 2019 were $1.85 billion.
Operating ratio was 66.5% on a non-adjusted basis, or 62.5% on an adjusted basis, in the third quarter, compared with 64.9% in the third quarter of 2019. Investors sometimes use operating ratio to gauge the financial health of a company, with a lower ratio implying improved health.
“Since launching our precision scheduled railroading strategy, we have significantly enhanced Norfolk Southern’s operational and financial performance and delivered superior returns for shareholders,” said NS President and CEO Jim Squires. “Given the impact of the COVID-19 pandemic on our industry and the broader economy, we quickly executed a plan to align our assets and resources with demand and generate sustainable margin improvement.”
Squires continued, “In addition to maintaining outstanding service levels with fewer resources and reduced headcount, we successfully idled our fifth hump in the last five quarters, helping Norfolk Southern achieve record productivity. With the resilience of our railroad, strong customer relationships and the hard work of our team, including new Chief Operating Officer and PSR veteran Cindy Sanborn, we are confident in our ability to achieve our goal of a 60% operating ratio with more to come, while delivering enhanced free cash flow and further value creation for Norfolk Southern shareholders.”
Average train speed was 22.6 mph and flat year-over-year, while average terminal dwell rose to 19.4 hours from 18.1 hours in the third quarter of 2019.