
                         Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: THURSDAY, July 29, 1993                   TAG: 9307290047
SECTION: BUSINESS                    PAGE: B8   EDITION: METRO 
SOURCE: DANIEL HOWES STAFF WRITER
DATELINE:                                 LENGTH: Medium

NS PACKAGES STRONG QUARTER FLOODING MAY DAMPEN LATER BOTTOM LINES

Norfolk Southern Corp., fueled by a surge in merchandise traffic and continuing expense control, rolled up a strong second quarter despite a $50.3 million charge for its restructuring of North American Van Lines Inc.

NS, which Tuesday boosted its dividend 3 cents per share, on Wednesday reported record earnings per share of $1.11, approximating the expectation of Wall Street analysts.

But senior executives meeting Wednesday with securities analysts in New York acknowledged that continued flooding in the Midwest and an ongoing coal miners' strike could hit the bottom line later this year.

Indeed, officials increased their estimate of damage caused by flooding to $10 million from $3 million. Miles of submerged track and washouts of roadbeds in Missouri and Illinois continue to worry the company. And, a spokesman in Roanoke said, NS may have lost a bridge to flooding, "but we can't get to it because the waters are too high."

Senior executives told analysts the strike by the United Mine Workers of America, which reached Virginia on July 13, has closed three mines in Southwest Virginia that account for 6 percent of the company's coal traffic.

NS does not expect the shutdown to further slow coal revenues - down 1 percent in the second quarter from last year's pace - unless the work stoppage continues for months.

"We are pleased to report strong second-quarter earnings, led by income from railway operations that improved 11.5 percent . . . " Chairman David Goode said in a statement. "We attribute this to strong growth in merchandise revenues, which offset the decline in coal revenues, and to tight control of costs."

So far this year, merchandise traffic - for example, automotive, chemicals, pulp and paper - has outstripped the company's merchandise business for 1991 and '92. At the same time, coal car loadings are lagging behind the past two years, reflecting the continued soft market for domestic utility coal and, especially, export coal.

Norfolk Southern's $50.3 million charge for the restructuring of North American - announced five days before the end of the quarter - was partially offset by a $31.5 million tax benefit associated with the restructuring.

by CNB