Norfolk Southern Corp. (NSC) Tuesday reported a 10 percent increase in profit for the first quarter, as higher shipment volumes and a gain from land sale helped the U.S. railroad transporter offset continued decline in coal shipments. Earnings for the quarter came in ahead of Wall Street estimates, although revenues fell short of expectations.
Virginia-based Norfolk Southern's first-quarter profit improved to $450 million or $1.41 per share from $410 million or $1.23 per share last year. On average, 27 analysts polled by Thomson Reuters expected earnings of $1.17 per share for the quarter. Analysts' estimates typically exclude special items.
Results for the first-quarter include a gain from sale of land to the Michigan Department of Transportation, which improved bottom line by $60 million or $0.19 per share.
Total railway operating revenues for the quarter declined 2 percent to $2.74 billion from $2.79 billion a year ago. Twenty-one analysts had consensus revenue estimate of $2.78 billion for the quarter.
Shipment volumes for the first quarter increased 3 percent.
Coal revenues, one of the biggest cargo category of the railroad transporter, declined 17 percent to $635 million due to lower prices and shipment volumes. Coal division's lackluster performance continues to be a drag on the company's top line, as almost all the major electric utilities now prefer cheaper natural gas.
General merchandise revenues improved 2 percent to $1.53 billion from last year, driven by increased shipments of chemicals and automobiles. Intermodal revenues climbed 9 percent to $573 million as volumes increased by 9 percent.
Railway operating ratio for the quarter worsened to 74.8 percent from 73.3 percent last year. A key metric, operating ratio measures operating expense as a percentage of net sales or revenue.
NSC closed Tuesday's regular trading at $75.84, up $0.78 or 1.04%, on a volume of 1.4 million shares. The stock dropped $0.34 or 0.45% in after hours.
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