(Dow Jones Newswires circulated the following story by Bob Sechler on January 27, 2010.)
WASHINGTON, D.C. — Norfolk Southern Corp. (NSC) executives said Wednesday that business conditions are improving in most of the railroad’s core markets, albeit slowly.
“We remain optimistic that we will see gradual but visible recovery” in most freight segments this year, Executive Vice President Donald Seale told analysts on a post-earnings conference call.
The comments echoed similar views from Union Pacific Corp. (UNP), Burlington Northern Santa Fe Corp. (BNI) and CSX Corp. (CSX), all which posted declines in overall fourth-quarter freight volume but said trends appeared to be improving.
Norfolk Southern, the last of the top four U.S. railroads to report fourth- quarter results, said its quarterly volume slipped 9% overall from the year-ago period. But the figure marked Norfolk Southern’s best quarterly performance of 2009, as well as a substantial improvement from a 20% decline in the third quarter.
“We expect to maintain the volume momentum from the fourth quarter as we head through the year,” Seale said.
He stopped short of providing an overall volume forecast for 2010. But the company said it expects all of its business segments either to be up or flat, aside from the international intermodal sector.
The railroad said it expects its volume of automobile-related shipments to be flat to up slightly in 2010, despite Toyota Motor Corp.’s (TM) decision Tuesday to halt sales of eight popular models.
Norfolk Southern counts Toyota as a major customer, but Seale called the auto maker’s decision “a short-term phenomenon” that won’t have a material impact on the first quarter or full year.
Meanwhile, the railroad said it raised core prices an average 4% in the fourth quarter, and 6% for the full year. It declined to reveal its precise plans for 2010 pricing, expect to say it expects an increase “above the rate of rail inflation.”