Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: THURSDAY, April 28, 1994 TAG: 9404280195
SECTION: BUSINESS PAGE: B-8 EDITION: METRO
SOURCE: GREG EDWARDS STAFF WRITER
DATELINE: LENGTH: Medium
"We are quite proud of this performance given the weather-related interruptions," NS Chairman David Goode said at a briefing in New York for security analysts. The record quarter also was especially satisfying because the earnings were principally the product of transportation operations, he said.
The operating ratio of NS's rail business - railway operating expenses compared to operating revenues - was 76.2 percent, the second-best first quarter ratio in the company's history. Railway operating revenues were up 1 percent and expenses down 1 percent.
The severe winter weather cost the company $9 million, said Henry Wolfe, NS's executive vice president for finance. That compared with $5 million the company spent recovering from the March 1993 blizzard that's been called the "storm of the century."
The earnings gains during the first quarter reflected increases in both merchandise and coal traffic, Goode said. Merchandise revenues were up 3 percent and coal revenues rose 5 percent. The increase in coal revenues was particularly welcome, coming after four consecutive quarters of decreases, Goode said.
The basic trends in the economy are positive and merchandise and coal growth should continue throughout the year, Goode said. NS's concentration on customer service will continue to pay off, he said.
NS's merchandise shipments are running 10 to 15 percent above last year, the company said. Feed grain shipments to the Southeast were up 4 percent. Fertilizer shipments led an increase in chemical shipments, which were up 7 percent.
Among intermodal shipments, those moved by a combination of rail and truck, trailer traffic was up 11 percent and container freight growth somewhat lower, said Henry Watts, executive vice president for marketing.
Goode reported that NS has just signed an agreement with CSX to carry intermodal shipments between New York and Chicago, initially representing 20,000 units a year but expected to grow to 50,000 annually.
Although NS's North American Van Lines trucking subsidiary has seen a significant short-term increase in business, the Teamsters' strike against truckers, on balance, has not had a significant impact on the company's business, Goode said.
Coal shipments suffered in January and February because of the weather but had rebounded strongly and were up 6 percent in volume for the quarter, Watts said. Export tonnage, however, was down 10 percent over last year and shipments of metallurgical coal to U.S. steel mills down 11 percent.
Bill Bales, NS vice president for coal marketing, said the coal export business should remain tough throughout the year. While the economy in Western Europe is improving, there is downward pressure worldwide on export prices and many U.S. suppliers are at a point where they have no room left to maneuver on prices, he said.
Goode said shipments of coal from Wyoming's Powder River basin to power plants in Georgia was increasing and expected to continue. "Naturally, we do everything we can to encourage the Eastern producers and the Eastern markets," he said. But he added that NS was not threatened by Western coal because it can handle coal moving either direction.
by CNB