(The Associated Press circulated the following story by Tim Huber on April 22.)
NORFOLK, Va. — Railroad operator Norfolk Southern Corp. said Tuesday its first-quarter profit rose 2 percent as higher revenue per shipment offset an overall decline in traffic and soaring fuel prices.
Norfolk Southern said it earned $291 million, or 76 cents per share, in the three months ended March 31. The company earned $285 million, or 71 cents per share, in the same period of 2007.
Revenue increased 11 percent to $2.5 billion, compared with $2.25 billion in first-quarter 2007, Norfolk Southern said. Railroad operating expenses, however, rose 12 percent to $1.9 billion, compared with first-quarter 2007. Norfolk Southern blamed a $156 million, or 63 percent, jump in fuel prices for much of the increase.
“Norfolk Southern delivered strong financial performance during the quarter, reporting the highest railway operating revenues in its history, in spite of a less than robust economy,” Chief Executive Wick Moorman said in a statement. “The results clearly indicate the strength of our balanced franchise, and we remain optimistic that we will produce continuing positive results in 2008.”
Despite Moorman’s optimism, Norfolk Southern’s earnings per share came in below Wall Street’s expectations.
Analysts surveyed by Thomson Financial had expected Norfolk Southern to report earnings of 78 cents per share on revenue of $2.35 billion.
Norfolk Southern blamed weakness in automotive, housing and intermodal shipments _ which involves moving freight from one transportation method to another _ for a 2 percent traffic decline.
However, there were some bright spots in the quarter.
For instance, Norfolk Southern said revenue from hauling coal jumped 19 percent to $662 million, compared with $557 million in first-quarter 2007.
Railroads have benefited in recent quarters from strong overseas demand for U.S. coal, particularly from Appalachia. U.S. coal exports rose more than 19 percent last year, according to the U.S. Energy Information Administration.
General merchandise revenue also was up 10 percent in the quarter to $1.35 billion, compared with $1.22 billion in 2007.
Based in Norfolk, Va., Norfolk Southern operates in 22 states, the District of Columbia and Ontario, Canada. Its stock fell 30 cents, or 0.49 percent, to $61.14 Tuesday.