(The Associated Press circulated the following article on April 27.)
NORFOLK, Va. — Railroad giant Norfolk Southern Corp. said first-quarter earnings increased 23 percent from last year, helped by the improving economy and companies seeking relief from high fuel prices.
Net income rose to $194 million, or 47 cents per share, from $158 million, or 40 cents per share, a year ago. First-quarter results included about $35 million of pretax expenses related to the Jan. 6 train derailment in Graniteville, S.C.
Total railway operating revenue grew 16 percent to $1.96 billion from $1.69 billion last year, and was the highest of any quarter in Norfolk Southern’s history.
Analysts surveyed by Thomson Financial were looking for the company to post earnings of 48 cents per share on sales of $1.9 billion in the latest quarter.
In midday trading Wednesday, Norfolk Southern shares fell 97 cents, or 2.9 percent, to $31.99 on the New York Stock Exchange. The stock has traded in a 52-week range of $22.89 to $38.99.
Norfolk Southern said traffic volume was up about 106,000 units, or 6 percent during the quarter. General merchandise revenue reached $1.1 billion, an increase of 12 percent over the same period last year.
“The strong economy continued to help us,” railroad president Wick Moorman said in a telephone interview. In addition, he said, rail traffic recently has been “more and more attractive” as fuel prices have risen.
All marketing groups, except automotive, reported strong revenue gains during the period, the company said. Metals and construction revenue led the growth with a 22 percent increase, followed by paper, up 19 percent, and chemicals, up 14 percent.
Revenues from movement of container traffic set a first-quarter record of $408 million, up 24 percent over the 2004 period. The railroad said it was the fifth consecutive quarter of double-digit revenue growth from intermodal traffic.
First-quarter operating expenses were $1.6 billion, up 16 percent over the same period in 2004. Norfolk Southern said this was primarily due to costs associated with increased traffic volume, higher diesel fuel prices and expenses related to the South Carolina derailment.
Norfolk Southern plans to buy about 100 new locomotives this year, but Moorman said he expected the railroad to continue its strong performance.