(The Associated Press circulated the following article on July 28.)
NORFOLK, Va. — Norfolk Southern Corp. said Wednesday that profits rose 55 percent in the second quarter, beating Wall Street estimates, as coal and merchandising shipping volumes increased and the company controlled expenses.
The railroad company earned $213 million, or 54 cents per share, in the three months ended June 30. Analysts surveyed by Thomson First Call had estimated earnings of 46 cents per share.
In the second quarter of 2003, Norfolk Southern earned $137 million, or 35 cents per share.
Second-quarter operating revenues of $1.8 billion were higher than any quarter in company history and were up 11 percent from $1.6 billion a year earlier.
Intermodal revenues climbed 21 percent to a record $364 million because of traffic growth from new truck-competitive services, increased units handled with trucking partners and strong international shipments, the company said.
General merchandise revenues rose 9 percent, reaching a record $1 billion. Metals and construction and chemicals revenues posted the largest gains in the quarter.
Coal revenues increased 9 percent to $424 million as demand for export coal increased.
Railway operating expenses in the quarter were up $53 million, or 4 percent, over the same period in 2003.
The strong results were driven by increased business volumes, effective expense controls and operating execution that allowed the company to deliver better service, said David R. Goode, chairman, president and chief executive.
At the same time, investments in new information and operating systems have improved efficiency. Norfolk Southern also has been able to hire sufficient train and engine crews and other operating staff to handle the volume efficiently, he said.
“That combination means we can keep the trains moving,” he said. “That makes the system work.”
Shares of Norfolk Southern rose 93 cents to close at $26.83 Wednesday on the New York Stock Exchange.