(The Associated Press circulated the following story by Sonja Barisic on January 24.)
NORFOLK, Va. — Railroad operator Norfolk Southern Corp. said Wednesday its fourth-quarter profit rose 6 percent, as record revenue from coal shipments offset a decline in freight transfer shipments stemming from the “softer economy.”
Shares fell $1.36, or 2.5 percent, to $52.37 in morning trading on the New York Stock Exchange.
Norfolk Southern earned $385 million, or 95 cents per share, in the three months ended Dec. 31, up from $362 million, or 87 cents per share, in the same quarter a year ago.
Revenue grew 3 percent to $2.32 billion from $2.26 billion during the same period a year ago.
Analysts surveyed by Thomson Financial had estimated a profit of 96 cents per share on revenue of $2.39 billion.
“We’re clearly facing a softer economy, at least in terms of some of our important markets and the overall surface transportation marketplace,” Chief Executive Officer Wick Moorman said in a statement. “But our traffic volumes are still at levels close to our all-time highs, evidence that the railroad renaissance is still alive and well.”
The company said revenue from coal shipments rose 13 percent to $592 million due, which helped offset a decline in intermodal shipments of 5 percent to $493 million. Intermodal involves transferring freight among types of transportation, such as loading shipping containers onto rail cars for final delivery.
General merchandise revenue rose 2 percent to $1.2 billion. All commodity groups within the segment, except for automotive, posted revenue growth in the period, the company said. Higher average revenues offset lower volume.
Railway operating expenses were $1.7 billion, up 3 percent from the fourth quarter of 2005.
For the year, Norfolk Southern earned $1.5 billion, or $3.57 per share, up 16 percent from $1.3 billion, or $3.11 per share, a year ago. The year-ago results included a benefit of $96 million, or 23 cents per share, from the effects of Ohio tax legislation.
Railway operating revenue for the year rose 10 percent to $9.4 billion.
For 2006, coal revenue grew 10 percent to $2.3 billion. Intermodal revenue rose 8 percent to $2 billion, on higher fuel surcharges and increased traffic volume.
Railway operating expenses rose 7 percent to $6.9 billion for 2006.