(The Associated Press circulated the following story by Sonja Barisic on July 25.)
NORFOLK, Va. — Railroad operator Norfolk Southern Corp. said Wednesday its earnings rose 5 percent in the second quarter as cost controls helped offset continued weakness in the automotive and housing industries that reduced shipping of parts and building material.
The company said it earned $394 million, or 98 cents per share, in the three months ended June 30, up from $375 million, or 89 cents per share, in the same quarter a year ago.
Revenue was $2.38 billion, compared with $2.39 billion in the prior-year period.
Analysts polled by Thomson Financial had expected a profit of 94 cents per share on revenue of $2.41 billion.
The results were strong, “particularly during a quarter characterized by continued softness in certain segments of the economy,” Chief Executive Wick Moorman said in a presentation to analysts.
Norfolk Southern improved revenue per unit despite volume pressure in the automotive and housing industries and softness in its intermodal business, Moorman said. In addition, the company was able to control operating costs, which declined 2 percent, he said.
The company said general merchandise revenues grew 1 percent during the quarter, as higher revenue per unit offset a decline in traffic volumes.
Volume fell 4 percent compared to the year-ago quarter due to continued weakness in the automotive and housing industries, Norfolk Southern said.
Coal revenues fell 1 percent to $579 million.
General merchandise revenues were a record $1.32 billion, up 1 percent on higher average revenue per unit.
Revenue from intermodal shipments – transferring freight among different types of transportation, such as loading shipping containers onto rail cars for final delivery – fell 4 percent to $479 million compared with the second quarter of 2006.
Railway operating expenses fell 2 percent to $1.69 billion.
Shares of Norfolk Southern fell 88 cents to $54.69 in midday trading.