(The following story by John D. Boyd appeared on The Journal of Commerce website on October 28, 2009.)
WASHINGTON, D.C. — Norfolk Southern Railway’s third-quarter profit fell 41.7 percent from a year earlier to $303 million, as rail revenue fell 28.7 percent to $2.063 billion.
The results brought NS’ profit margin to 14.7 percent of rail receipts, from nearly 18 percent in the 2008 quarter. But it ended September with just under $1 billion in cash on hand, up from $618 million at the end of December and $557 million on Sept. 30, 2008.
Chairman, President and CEO Charles W. Moorman said the eastern-U.S. railroad’s performance reflected both the weak economy and “resilience” by NS.
“By controlling costs and maintaining service levels, we are managing through this economic downturn and will emerge an even stronger company,” he said.
NS cut rail operating costs by 25 percent from a year earlier, partly aided by a 59 percent plunge in fuel expense and because the 2008 quarter had one-time extra payments to train engineers under a new labor contract.
It also cut the average payroll to 27,514 workers in the latest quarter, from 30,214 in third-quarter 2008.