(Reuters circulated the following article on October 26.)
BOSTON — Rail operator Norfolk Southern Corp. on Wednesday said profit rose 5 percent on brisk demand from retailers and manufacturers ahead of the holiday season, while expenses increased because of Hurricanes Rita and Katrina.
The fourth-largest U.S. railroad reported net earnings of $301 million, or 73 cents per share, compared with $288 million, or 72 cents per share, a year earlier, when it booked a $53 million gain from the reorganization of a unit.
The results missed the average forecast of 74 cents from analysts polled by Reuters Estimates.
Operating revenue rose 16 percent to $2.16 billion, compared with analysts’ expectations for for $2.1 billion.
Operating ratio, a measure of operating efficiency, came in at 75.5 percent, slightly worse than the year-earlier ratio of 74.7 percent.
Norfolk Southern operates the largest intermodal network, which involves multiple forms of transport, in the eastern United States. It continues to benefit from a strong economy, while high fuel prices make the railroads a cost-effective alternative to truckers.
The company’s financial report comes on the heels of strong results from Canada’s biggest railway, Canadian National Railway Co.
Norfolk Chief Executive David Goode told Reuters earlier this month that the direct effect of the two powerful hurricanes contributed to higher expenses and capital expenditures during the third quarter.
The storms knocked out Norfolk Southern’s freight rail service into New Orleans for a couple of weeks and closed its intermodal terminal for train-truck transfer for more than a month.
So far this year, Norfolk Southern shares have risen 10 percent, slightly behind the 12 percent rise on the S&P Railroads index.