(The Associated Press circulated the following story by Samantha Bomkamp on April 27, 2010.)
NEW YORK Norfolk Southern Corp. is convinced the U.S. economic recovery is well under way. It's just not sure how fast it will happen.
The railroad's confidence comes from improving shipping volume in the first three months of the year that helped its first-quarter profit rise 45 percent. The improvements have continued through this month, indicating that more manufacturing lines are churning and consumers are starting to buy again.
Norfolk Southern said shipping prices rose 3 percent in the quarter and productivity improved. Although fuel costs are a growing concern. They shot up 60 percent from a year ago.
Norfolk Southern earned $257 million, or 68 cents per share in the first quarter, compared with $177 million, or 47 cents per share, a year earlier. The most recent quarter included a charge of 7 cents per share related to the newly enacted health care law.
Revenue rose 15 percent to $2.22 billion, on higher shipping volume and prices. Shipping volume overall rose 9 percent.
Analysts, on average, expected a profit of 66 cents per share on revenue of $2.11 billion, according to a poll by Thomson Reuters.
Norfolk Southern, based in Norfolk, Va., said revenue for general merchandise -- its biggest segment, which includes a wide range of products from food to cars, rose 23 percent.
Revenue from coal shipments increased 4 percent, mostly from the uptick in global steel production. Coal mined in the U.S. can also be used to produce electricity. Rival CSX said last week its coal shipments were down because there was less demand for coal to generate power.
Revenue from Norfolk Southern's intermodal segment, which includes transfers from trucks and ships, rose 12 percent. That's a good sign that consumer spending is improving, because many retail goods are shipped that way.
Norfolk Southern said in a conference call Tuesday it thinks transfers from trucks will continue to improve because demand is better and there are fewer trucks on the road than there were a year ago, which allows prices to rise.
Norfolk Southern's results follow earnings reports from two other major railroads last week. Union Pacific Corp., the nation's largest railroad, said its profit rose 43 percent. CSX earnings improved by 20 percent from a year ago. All three railroads say they think the economy is looking up.
Norfolk Southern shares fell $1.44, or 2.4 percent, to close at $59.65 on Tuesday as the broader market declined
