| Norfolk Southern 1Q profit falls 39 percent | ||||
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NEW YORK — Norfolk Southern Corp., the largest rail carrier of metals and automotive products in North America, said Tuesday its first-quarter earnings tumbled 39 percent as lower costs could not offset plunging shipping demand. The Norfolk, Va.-based company said Tuesday it earned $177 million, or 47 cents per share, compared with $291 million, or 76 cents per share a year earlier. Revenue dropped 22 percent to $1.94 billion. Thomson Reuters says analysts expected profit of 54 cents per share on revenue of $2.04 billion. Norfolk Southern ( NSC - news - people )'s operating expenses dropped to $1.56 billion, from $1.92 billion a year earlier. It paid less than half for fuel in the period than it did a year ago, furloughed employees and scaled back parts of its operation to save money. Revenue from transfers between trucks and trains - the intermodal segment - fell 25 percent to $366 million. Coal revenue, which leaped when energy prices were rising last year, fell 9 percent to $602 million. And sales in the railroad's general merchandise category - which includes everything from cars to lumber - fell 28 percent to $975 million. "Current economic conditions were clearly reflected in Norfolk Southern's first-quarter results," Chief Executive Wick Moorman said in a statement. "We are responding by aggressively controlling costs, while enhancing our service and continuing to invest in projects that will drive future growth. This approach will position us to participate in the economy's eventual recovery as we tightly manage the company in the face of an ongoing reduction in railway traffic volumes." Norfolk Southern's business is tightly bound to the health of the U.S. economy because it carries a number of manufactured and retail goods across the country. Norfolk Southern's results are similar to those that eastern rival CSX Corp. reported last week. CSX said its first-quarter profit sank 30 percent from a year earlier. But its results still beat Wall Street's expectations as operating expenses dropped. Jacksonville, Fla.-based CSX believes that double-digit declines in its shipping volume will continue through the second quarter. It also expects to furlough more employees as a result. The two largest rails operators, Union Pacific Corp. and Burlington Northern Santa Fe Corp., are both expected to release results for the first-quarter on Thursday. Shares of Norfolk Southern fell $3.80, or 10.2 percent, to $33.57 in aftermarket trading. |