Norfolk Southern 2Q profit up 2% despite weaker volume

(James St. John/ Wikimedia Commons)
(Southside Daily file)

NORFOLK — Norfolk Southern Corp.’s earnings chugged ahead 2 percent even though the railroad hauled 4% less freight in the second quarter because it was able to raise its shipping rates.

The Norfolk-based company said it earned net income of $722 million, or $2.70 per share. That’s up from $710 million, or $2.50 per share, a year ago.

The results fell short of the $2.77 per share that seven analysts surveyed by Zacks Investment Research predicted.

The railroad posted revenue of $2.93 billion in the period, which met Street forecasts.

“It was a disappointing earnings quarter,” Edward Jones analyst Jeff Windau said. “But they are just getting started with their reforms,”

Norfolk Southern said it implemented a package of reforms earlier this month that are designed to help it operate the railroad on a tighter schedule and move more freight with fewer people. The reforms are similar in concept to what all the major U.S. freight railroads have implemented over the past two years.

Norfolk Southern took a more deliberate approach to the reforms than some other railroads have, including holding 19 town hall meetings with employees and customers beforehand.

The railroad is in the process of building a new headquarters in Atlanta. Norfolk Southern operates about 20,000 miles of track in 22 states and the District of Columbia.

In morning trading, Norfolk Southern shares slipped 3.5 percent to $189.88.

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John Mangalonzo (john@localvoicemedia.com) is the managing editor of Local Voice Media’s Virginia papers – WYDaily (Williamsburg), Southside Daily (Virginia Beach) and HNNDaily (Hampton-Newport News). Before coming to Local Voice, John was the senior content editor of The Bellingham Herald, a McClatchy newspaper in Washington state. Previously, he served as city editor/content strategist for USA Today Network newsrooms in St. George and Cedar City, Utah. John started his professional journalism career shortly after graduating from Lyceum of The Philippines University in 1990. As a rookie reporter for a national newspaper in Manila that year, John was assigned to cover four of the most dangerous cities in Metro Manila. Later that year, John was transferred to cover the Philippine National Police and Armed Forces of the Philippines. He spent the latter part of 1990 to early 1992 embedded with troopers in the southern Philippines as they fought with communist rebels and Muslim extremists. His U.S. journalism career includes reporting and editing stints for newspapers and other media outlets in New York City, California, Texas, Iowa, Utah, Colorado and Washington state.