(Bloomberg News circulated the following article by Rip Watson and Erin Burnett on July 10.)
NEW YORK — CSX Corp. and Norfolk Southern Corp., the biggest railroads in the eastern United States, said they are being helped by rising imports that are countering any slowdown in the U.S. industrial economy.
“The economic cycle usually has a very large effect on the rail industry,” CSX Chief Financial Officer Oscar Munoz said in an interview. “As the industrial sector slows, that heavy import business is creating a nice uptick in demand for our service.”
Norfolk Southern Chief Financial Officer Henry Wolf said in a separate interview that “the growth we are seeing is pretty strong across the board, except for autos.”
Both companies are expected to report increased earnings on July 27. CSX is expected to say second-quarter earnings rose about 50 percent to 82 cents a share, the average estimate in a Thomson Financial survey, from $119 million, or 55 cents, a year earlier. Norfolk Southern is expected to say profit climbed about 20 percent to 66 cents a share from $213 million, or 54 cents.
Norfolk Southern shipments rose 9 percent last year, 6 percent in this year’s first quarter and about 4 percent in the second quarter, Wolf said. The company is based in Norfolk, Va.
The rise in shipments of Asian imports is part of a “paradigm shift” for Jacksonville, Fla.-based CSX, Munoz said. He said the railroad has been raising prices, without giving details. Munoz didn’t say how much business CSX has gained for any cargo category.