Norfolk Southern Corp.

Volumes began to recover in the second half of the year. Resumed production and strong sales of motor vehicles have boosted auto carloads in recent weeks. Increased activity at East Coast ports and a tighter trucking market have also boosted intermodal volumes. Nonetheless, total carloads remain below 2019 levels. In addition, lower fuel prices will also lead to lower fuel surcharge revenues. Overall, we forecast revenues will decline in the mid-teen percent area in 2020 from 2019 levels. We assume macroeconomic conditions will improve in 2021, leading to revenue growth in the high-single-digit percent area. The outlook is stable. We believe revenues will decline in the low-teen percent area in 2020 as Norfolk Southern faces reduced demand amid lower economic

...We expect lower carload volumes will result in lower revenues for 2020. Amid the COVID-19 pandemic, reduced economic activity and lower energy prices have weighed on carloads for all U.S. Class I railroads. Norfolk Southern Corp. has experienced the largest carload decline among its peers through the end of October 2020, with total carloads decreasing about 15% from the prior year. Coal carloads saw the sharpest decline, falling about 39% over this period, as low natural gas prices made coal less price competitive and economic shutdowns reduced industrial demand for both domestic and export coal. Coal demand has declined in recent years because of lower natural gas prices and more stringent environmental regulations. Therefore, while we forecast coal volumes will improve modestly next year, we do not expect volumes to improve to pre-pandemic levels. Outside of coal, carloads related to autos, including finished vehicles and metals, also declined. Volumes began to recover in the second half...

Full Report