(The Associated Press circulated the following story by Samantha Bomkamp on January 27, 2009.)
NORFOLK, Va. — Railroad operator Norfolk Southern said Tuesday its fourth-quarter profit rose 13 percent as higher shipping prices and lower fuel costs offset tumbling demand for goods.
Norfolk Southern Corp. said Tuesday it earned $452 million, or $1.21 per share, compared with $399 million, or $1.02 per share, in the fourth-quarter of 2007.
Revenue edged up 2 percent to $2.5 billion.
Thomson Reuters says analysts expected profit of $1.18 per share on sales of $2.6 billion.
The Norfolk, Va.-based company said traffic fell 8 percent during the quarter. Revenue in two out of three commodity groups fell during the quarter as volume slipped. General merchandise revenues – which are heavily tied to trends in consumer spending – fell 10 percent to $1.2 billion, mostly due to a 19 percent drop in traffic.
Revenue from intermodal, which involves goods transferred from trucks to trains, fell 3 percent to $480 million.
One bright spot was coal shipments, which jumped 33 percent to $798 million on increased shipments and higher prices.
Fuel costs fell 24 percent to $269 million, from $353 million a year ago.
Last week, Norfolk Southern’s eastern rail competitor CSX Corp. said its earnings sank 32 percent mostly due to a charge related to a money-losing resort the company owns. But excluding that charge, the company reported adjusted earnings per share 5 percent higher than a year earlier – narrowly missing Wall Street’s predictions.
For the full-year 2008, Norfolk Southern’s profit rose to $1.72 billion, or $4.52 a share, from $1.46 billion, or $3.68 per share, in 2007.
Revenue rose 13 percent to $10.66 billion.
Norfolk Southern CEO Wick Moorman said in a statement that while the overall economic outlook remains hazy, the company will continue to make investments to improve its infrastructure. Norfolk Southern plans to invest $1.4 billion in capital improvements this year to improve efficiency, service and safety.
Norfolk Southern closed up $2.35, or 6.7 percent, at $37.65. Shares fell 2 cents in aftermarket electronic trading.