(Norfolk Southern issued the following news release on July 28.)
NORFOLK, Va. — For the second quarter of 2004, Norfolk Southern Corporation reported net income of $213 million, or $0.54 per diluted share, an increase of 55 percent, compared with $137 million, or $0.35 per diluted share, for the second quarter of 2003.
Second-quarter operating revenues of $1.8 billion were the highest of any quarter in Norfolk Southern’s history and improved 11 percent compared with $1.6 billion in the second quarter of 2003. The operating ratio for the quarter was 5 percentage points better at 76.6 percent compared to the same period last year.
“Norfolk Southern’s strong second-quarter results were driven by increased business volumes, effective expense controls and operating execution that is allowing us to deliver a higher quality, higher value service,” said David R. Goode, chairman, president and chief executive officer. “We continue to add train and engine crews, and they, along with the entire Thoroughbred team, are helping Norfolk Southern handle the strongest business growth we have seen in years.”
For the first six months, income from continuing operations before accounting changes was $371 million, or $0.94 per diluted share, an increase of 67 percent compared with last year’s $222 million, or $0.57 per diluted share. Reported net income for the first half of 2003 was $346 million, or $0.89 per diluted share, which included a $114 million, or $0.29 per diluted share, gain due to a required industry-wide accounting change to account for the cost of removing railroad crossties, and a gain of $10 million, or $0.03 per diluted share, from discontinued motor carrier operations.
Railway operating revenues for the first half of 2004 set a six-month record, increasing 10 percent to $3.5 billion compared with $3.2 billion for the same period a year earlier.
The railway operating ratio for the first six months also improved 5 percentage points to 78.0 percent compared with 83.4 in the first half of 2003.
Intermodal revenues climbed 21 percent to a record $364 million in the second quarter and improved 17 percent to $692 million for the first six months compared to the same periods of 2003. Traffic growth from new truck- competitive services, increased units handled with trucking partners and strong international shipments helped drive the growth.
Second-quarter general merchandise revenues reached a record $1 billion, an increase of 9 percent over the same quarter last year. For the first six months, general merchandise revenues improved 7 percent to $2 billion compared with the year-earlier period. All merchandise markets reported revenue gains compared with the same periods a year earlier. Metals and construction and chemicals posted the largest gains in both the quarter and for the first six months.
Coal revenues increased 9 percent to $424 million in the second quarter and improved 11 percent to $822 million for the first six months of 2004 compared with the same periods last year. This growth was driven by increased demand for export coal and better revenue yields.
Second-quarter railway operating expenses were up $53 million, or 4 percent, compared with second quarter last year. For the first six months, railway operating expenses rose $70 million, or 3 percent, over the same period in 2003. This was primarily due to higher costs associated with compensation and benefits and diesel fuel.
“As we move into the remainder of the year, I am confident that Norfolk Southern can continue to leverage our operational momentum, again improve service quality and energetically pursue new business and margin improvement,” Goode said.
Norfolk Southern Corporation is one of the nation’s premier transportation companies. Its Norfolk Southern Railway subsidiary operates 21,500 route miles in 22 states, the District of Columbia and Ontario, serving every major container port in the eastern United States and providing superior connections to western rail carriers. NS operates the most extensive intermodal network in the East and is the nation’s largest rail carrier of automotive parts and finished vehicles.