NORFOLK, Va. - Norfolk Southern Corp. announced Wednesday that its profit for the fourth quarter fell 32 percent, as the effects of the recession lingered, The Virginian Pilot reports.
Net income for the Norfolk-based railroad was $307 million, or 82 cents a share, for the quarter that ended Dec. 31, down from $452 million, or $1.21 cents a share, in the fourth quarter of 2008.
The earnings fell short of Wall Street projections by 2 cents a share. The consensus earnings-per-share estimate of analysts surveyed by Bloomberg News was 84 cents.
Norfolk Southern's operating revenues for the fourth quarter dropped 16 percent to $2.1 billion, from $2.5 billion in the same quarter a year ago.
Despite the company's earnings miss, Anthony Hatch, a New York-based independent railroad analyst, still saw reason for some optimism.
"All was not lost," he said, citing the company's good operational discipline as well as its history and "the planning they have done for the changing economy and emerging opportunities," particularly in its domestic intermodal business, involving the shipment of truck trailers and shipping containers.
"Our fourth-quarter results demonstrate a continuation of the momentum we have generated since the second quarter of 2009," said CEO Wick Moorman.
"The results reflect a high level of performance throughout Norfolk Southern, and showcase the strength and flexibility of our franchise, our industry-leading safety and service performance and continuing strong cost discipline."
Quarterly revenues declined across the railroad's business segments:
- General merchandise fell to $1.1 billion, a 9 percent drop from $1.2 billion in the same quarter a year earlier.
- Coal slid to $580 million from $798 million last year, a 27 percent drop.
- Intermodal fell to $407 million from $480 million last year, a 15 percent decline.
Norfolk Southern released its earnings after the close of trading on the New York Stock Exchange.
In trading Wednesday, its stock price rose 68 cents a share, closing at $50.43.
The railroad, the fourth-largest in the United States, was the last of the nation's big railroads to announce fourth-quarter results; the other three reported their fourth-quarter earnings last week:
- Union Pacific, the biggest, announced that its profit dropped 17 percent to $551 million, down from $661 million in the same quarter of 2008. Revenue slipped 12 percent to $3.75 billion, from $4.29 billion.
- Burlington Northern Santa Fe, the second-largest, reported that its profit dropped 13 percent to $536 million compared with $615 million in the fourth quarter of 2008. Revenue dropped nearly 16 percent to $3.68 billion, from $4.37 billion a year earlier.
- CSX Corp., the third-largest, reported its net earnings rose 23 percent compared with a year ago - a period weighed down by a loss related to the company's sale of the Greenbrier resort. Excluding that year-ago loss, earnings from continuing operations fell 16 percent. CSX reported fourth-quarter 2009 net earnings of $305 million, up from $247 million in the same quarter of 2008. Revenue fell 13 percent to $2.32 billion, from $2.67 billion a year earlier.
Norfolk Southern operates roughly 21,000 route miles in 22 states and the District of Columbia. As of the end of December, it had 27,600 employees. About 1,000 of them are in the Norfolk area.
which is it? 32% or 37% ??? Norfolk Southern profit falls 37 percent
(The following story by John D. Boyd appeared on The Journal of Commerce website on January 27, 2010.)
WASHINGTON, D.C. Norfolk Southern Railways fourth-quarter net income fell 32 percent from a year earlier to $307 million, as revenue fell 16 percent to $2.1 billion.
The companys fourth-quarter receipts and profit margin as a percent of revenue improved from earlier in the recession year, which was marked by a plunge in freight volume in the first half and a mild recovery later.
The eastern-U.S. Class I carrier generated a 14.6 profit margin in the final 2009 period, while profit was 13 percent of receipts for the entire year.
For all of 2009, net income fell 40 percent to $1 billion. Revenue fell 25 percent to nearly $8 billion.
Our fourth-quarter results demonstrate a continuation of the momentum we have generated since the second quarter, said Charles W. Moorman, the chairman, president and CEO. He said the latest results also reflect the carriers flexibility and cost-cutting discipline.
NS reduced operating expenses 8 percent in the quarter from the same 2008 period and 21 percent for the full year, as it idled numerous locomotives and freight cars to keep pace with traffic. It also shed workers and averaged 27,595 employees in the fourth quarter, down 9 percent from 30,339 a year earlier.
Moorman said NS this year should build on the sequential gains of the 2009 third and fourth quarters, both from economic improvement and growth from projects.
He said the company will invest about $1.4 billion in capital improvements this year, slightly higher than in 2009. NS will soon complete its three-year Heartland Corridor doublestack intermodal route into the Midwest from the Atlantic coast.
