Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: THURSDAY, January 27, 1994 TAG: 9401270024
SECTION: BUSINESS PAGE: B8 EDITION: METRO
SOURCE: GREG EDWARDS STAFF WRITER
DATELINE: LENGTH: Medium
NS earnings per share of common stock were $1.15, the highest of any previous quarter and 26 percent higher than the fourth quarter of 1992's results of 92 cents per share.
Total net income for the quarter was $159.4 million, 24 percent higher than the 1992 quarter.
NS managed the record earnings despite an 8 percent drop in total transportation operating revenues, from $1.17 billion to $1.09 billion.
The strong performance in the quarter was particularly encouraging, considering a 6 percent drop in coal revenues, NS Chairman David Goode told a gathering of securities analysts Wednesday morning in New York.
But an overall decline in freight revenues was more than offset by a 14 percent cut in total transportation operating expenses. That included nearly $100 million cut from the cost of operating NS's North American Van Lines subsidiary, which sold off some of its business during the year.
NS reported a profit of $772 million for 1993, up 38 percent from a year earlier. However, $178 million of that gain was due to the cumulative effect of accounting changes and a retroactive increase in the federal corporate income-tax rate.
On a comparable basis, not including the accounting changes and income-tax rate increase, The company's income for the year was $594.9 million, a 7 percent increase from 1992.
As NS begins a new year, it believes the underlying trends in the economy are favorable for growth in both freight and intermodal freight traffic, Goode said.
NS expects an increase in its domestic coal traffic this year and said it hopes to see a recovery in coal exports as European economies start to pull out of their recession, Goode said. Most coal traffic declines have been the result of smaller orders from export customers.
Settlement of the United Mine Workers strike, increases in consumer spending and confidence, and the passage of the North American Free Trade Agreement and the General Agreement on Tariffs and Trade brought 1993 to an end on a positive note, added Henry Watts, executive vice president for marketing.
Describing improvements in the railroad's various merchandise markets, Watts also reported that the company expects to obtain $3 million in new revenue in 1994 from hauling solid waste.
"Do you believe that's a garbage house?" he asked, showing the analysts a picture of Roanoke's new garbage-transfer station on Hollins Road.
The company has taken steps to improve profit margins, Watts said, including a team approach toward reducing costs that, among other things, has cut damage claims 16 percent, improved car use 12 percent and reduced injuries 31 percent.
NS had its best year ever for safety in 1993, Goode said. The company reduced by 10 percent an injury rate that already was the best in the business, he said.
NS also set another record in the fourth quarter by improving its operating ratio to 73.8 percent from 75.1 percent in the 1992 quarter. The ratio represents the percentage of revenues that go into operating the railroad.
by CNB