Railroad transporter Norfolk Southern Corp. (NSC: Quote), said Tuesday its second quarter profit declined six percent from last year, when results benefited from significant income tax benefit.
Quarterly revenues meanwhile grew slightly from last year on growth in General Merchandise and Intermodal segments, while Coal division continued to be a drag on its topline. Norfolk Southern's quarterly earnings topped Street estimates, while revenues missed expectations.
During the second quarter, revenues from General merchandise improved 9 percent from last year, while Intermodal revenue was up 4 percent. Intermodal segment involves the transportation of freight in an intermodal container or vehicle, using multiple modes of transportation. Industry wide, it is reported that the intermodal segment has been garnering a higher share at the cost of U.S. rail traffic.
The company's Coal segment recorded a 15 percent drop in revenue and continued to weigh on its topline. Pertinently, as per data by Association of American Railroads, coal volumes declined 11.7 percent during the quarter.
The company's railway operating ratio improved 2 percentage points from last year to 67.5 percent. A key metric, operating ratio measures the percentage of revenue consumed by expenses.
CEO Wick Moorman said, "In the second quarter, Norfolk Southern continued to deliver outstanding results. Our income from operations, diluted earnings per share and improved operating ratio all set records, despite the slow economic recovery and softness in our coal franchise."
Virginia-based Norfolk Southern reported second quarter net income of $524 million, down from $557 million last year. However, on a per share basis, earnings increased to $1.60 from $1.56 a year ago, reflecting a lower share count.
Results for the prior year quarter included one-time income tax-related benefits of $63 million or $0.18 per share.
On average, 26 analysts polled by Thomson Reuters expected the company to earn $1.53 per share for the quarter. Analysts' estimates typically exclude special items.
Railway operating revenues for the quarter totaled $2.874 billion, compared to $2.866 billion in the prior year. Twenty-one analysts had a consensus revenue estimate of $2.95 billion for the quarter.
NSC closed Tuesday's trading at $71.96, down 0.32%, on a volume of about 2 million shares on the NYSE. In the past year, the stock has traded in a range of $57.57 - $78.50.
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by RTT Staff Writer
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