(Reuters circulated the following story by Nick Carey on January 23.)
CHICAGO — The U.S. economy should see lackluster growth in 2008, but it is unclear whether it is headed for recession, the top executive of U.S. railroad Norfolk Southern Corp. said on Wednesday.
“Our forecast is for another lukewarm year,” Chief Executive Wick Moorman told Reuters in a telephone interview. “But what level of growth we’ll see is too hard to predict right now.”
Moorman also said he was “reasonably confident” the railroad would be able to implement average freight price increases of 4 percent in 2008.
Moorman spoke to Reuters the day after the Norfolk, Virginia-based company reported fourth-quarter results that beat market expectations.
Like other U.S. railroads, Norfolk Southern has reported strong profits in the past few quarters, despite weak freight volumes due to strong pricing.
“We believe shares of Norfolk Southern provide an excellent entry point for investors looking to participate in the long- term positive secular trends of the rail industry,” Longbow Research analyst Lee Klaskow wrote in a research note.
Bear Stearns analyst Edward Wolfe wrote in a research note for clients that Norfolk Southern’s quarterly report “gives us increased conviction that NSC can grow EPS without (freight) volumes.”
Bear Stearns repeated its “outperform” rating on Norfolk Southern.
In afternoon trading on the New York Stock Exchange, Norfolk Southern shares were up $2.48, or 5.5 percent, at $47.55.