Norfolk Southern profit soars, beats views

Norfolk Southern's operating ratio — a key measure of efficiency for railroads — improved by 2 percentage points to 69.1 percent. (AP photo)

By SAMANTHA BOMKAMP
The Associated Press

10/22/2008

NEW YORK — Freight railroad operator Norfolk Southern Corp. said surging coal revenue and improving efficiency drove its third-quarter earnings up 35 percent.

The results came in well above Wall Street's expectations. Shares jumped $3.33, or 6.2 percent, to $57.20 in aftermarket electronic trading. The stock finished the regular session down $1.99, or 3.6 percent, to $53.87.

The Norfolk, Va.-based company earned $520 million, or $1.37 per share, compared with $386 million, or 97 cents per share.

Revenue rose 23 percent to $2.89 billion, from $2.35 billion a year earlier.

Thomson Reuters says analysts were expecting a profit of $1.21 per share on revenue of $2.76 billion.

Coal revenue surged 52 percent to $876 million. Overall traffic fell 1 percent, as higher coal volumes countered sinking carloads of automobiles and housing-related products.

The railway operating ratio — a key measure of efficiency for railroads — improved by 2 percentage points to 69.1 percent.

As fuel costs leaped 64 percent from last year, overall costs during the quarter jumped 20 percent to $2 billion.