(The following story by John D. Boyd appeared on The Journal of Commerce website on January 27, 2010.)
WASHINGTON, D.C. — Norfolk Southern Railway’s fourth-quarter net income fell 32 percent from a year earlier to $307 million, as revenue fell 16 percent to $2.1 billion.
The company’s fourth-quarter receipts and profit margin as a percent of revenue improved from earlier in the recession year, which was marked by a plunge in freight volume in the first half and a mild recovery later.
The eastern-U.S. Class I carrier generated a 14.6 profit margin in the final 2009 period, while profit was 13 percent of receipts for the entire year.
For all of 2009, net income fell 40 percent to $1 billion. Revenue fell 25 percent to nearly $8 billion.
“Our fourth-quarter results demonstrate a continuation of the momentum we have generated since the second quarter,” said Charles W. Moorman, the chairman, president and CEO. He said the latest results also reflect the carrier’s flexibility and cost-cutting discipline.
NS reduced operating expenses 8 percent in the quarter from the same 2008 period and 21 percent for the full year, as it idled numerous locomotives and freight cars to keep pace with traffic. It also shed workers and averaged 27,595 employees in the fourth quarter, down 9 percent from 30,339 a year earlier.
Moorman said NS this year should build on the sequential gains of the 2009 third and fourth quarters, both from economic improvement and growth from projects.
He said the company will invest about $1.4 billion in capital improvements this year, slightly higher than in 2009. NS will soon complete its three-year Heartland Corridor doublestack intermodal route into the Midwest from the Atlantic coast.