(The Associated Press circulated the following story by Sonja Barisic on April 25.)
NORFOLK, Va. — Norfolk Southern Corp. said Wednesday its first-quarter profit fell 7 percent, despite the railroad’s efforts to trim operating costs with fewer automakers and home builders shipping parts and building materials.
Quarterly earnings dropped to $285 million, or 71 cents per share, in the quarter ending March 31, from $305 million, or 72 cents per share during the same period last year. Revenue declined 2 percent to $2.25 billion from $2.3 billion.
Analysts polled by Thomson Financial forecast a profit of 70 cents per share on revenue of $2.32 billion.
Chief Executive Wick Moorman said the results were encouraging in light of the softness in the economy.
“We do believe that demand for our transportation services will continue to grow,” Moorman said during a presentation to analysts.
The company had warned earlier this month that it expected profits to decline from the same period last year because of housing and auto industry slowdowns.
Norfolk Southern trimmed operating costs — largely through lower compensation and benefits — by 2 percent to $1.7 billion, despite winter weather that was more severe than last year during the same period.
But the company could not overcome a 4 percent slide in overall freight volume, compared with record volumes in the same period a year ago, as the automotive and housing industries continued to slow.
Revenue from general merchandise freight slipped 4 percent to $1.23 billion, while coal revenue fell slightly to $557 million from $559 million. Revenue from intermodal shipments — transferring freight among different types of transportation, such as loading shipping containers onto rail cars for final delivery _ fell 1 percent to $462 million.
Norfolk Southern shares fell 61 cents to $54.96 in midday trading on the New York Stock Exchange.