Net income for the quarter was $511 million, or $1.64 per diluted share, compared with $513 million, or $1.64 per diluted share, earned in fourth-quarter 2013. For the year, net income increased to a record $2.0 billion, 5% higher compared with $1.9 billion for 2013. Diluted EPS for 2014 was a record $6.39, up 6% compared with $6.04 per diluted share for 2013. Fourth-quarter railway operating revenues totaled $2.9 billion; income from railway operations was $891 million, a fourth-quarter record and 1% higher compared with fourth-quarter 2013. The railway operating ratio improved 1%, to 69.0%.
Quarterly operating revenues about even compared with fourth-quarter 2013, with gains in merchandise and intermodal revenues offsetting weaker coal revenues. Total volume was up 4%, or about 66,000 units, due to gains in intermodal and merchandise traffic.
Quarterly general merchandise revenues were $1.7 billion, 3% higher than the same period last year. Volume grew by 5%, led by increases in shipments of chemicals and metals and construction materials. The five commodity groups reported mixed revenue results on a year-over-year basis: Chemicals: $477 million, up 11%; Agriculture: $387 million, down 2%; Metals/Construction: $366 million, up 5%; Automotive: $253 million, even; and Paper/Forest: $195 million, down 3%. Intermodal revenues increased to $649 million, 5% higher compared with fourth-quarter 2013. Growth in international and domestic business pushed traffic volume up 6% in the quarter compared with the same period of 2013. Coal revenues were $543 million, 15% lower compared with the fourth quarter of 2013. A weak global export market and fewer shipments of coal to utilities combined to decrease volume by 6%.
Quarterly operating expenses were $2.0 billion, down 1% compared with the same period of 2013.
For full-year 2014, NS’s railway operating revenues reached a record $11.6 billion, 3% higher compared with 2013, driven by a 5% increase in traffic volume. Income from railway operations was a record $3.6 billion, 10% higher compared with 2013. The operating ratio was a record 69.2%, a 3% improvement compared with 71.0% in 2013. General merchandise revenues rose 6% to $6.7 billion. Intermodal revenues increased to $2.6 billion, up 7%. Overall traffic volume was 8% higher for 2014 compared with 2013. Coal revenues were $2.4 billion, down 6%, due to a 5% decline in traffic volume. Railway operating expenses were $8 billion, up 1% compared with 2013.
“Norfolk Southern delivered another solid quarter of financial performance, capping a record-setting year during which our company achieved its best results for revenues, operating income, net income, earnings per share, and operating ratio,” said CEO Wick Moorman. “For 2015, we plan to invest $2.4 billion in capital investments to maintain the safety and quality of our rail network, enhance service, improve operational efficiency, and support growth opportunities.”