Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: THURSDAY, January 26, 1995 TAG: 9501260099
SECTION: BUSINESS PAGE: B-8 EDITION: METRO
SOURCE: GREG EDWARDS STAFF WRITER
DATELINE: LENGTH: Medium
Earnings per share of $1.31 in the fourth quarter set a record, beating the previous high reached in the second quarter of 1994 by one penny. Fourth-quarter net income was $176.1 million, an increase of 10 percent from $159.4 million during the same period a year earlier.
Net income for all of 1994 was $667.8 million, which itself is a record after tax and accounting changes that increased 1993 net income are deducted from the higher 1993 total. Not counting the 1993 tax and accounting windfall, NS's 1994 net income was up 12 percent from that of 1993 and its 1994 earnings per share were 15 percent higher than 1993.
"Our record-breaking results for 1994 are particularly gratifying because they were driven by the basic strength of our transportation operations and our continuing emphasis on productivity improvements," NS Chairman David Goode said in a company statement.
Goode told a meeting of securities analysts in New York on Wednesday morning that he feels the economic expansion that brought NS record results last year is likely to continue in 1995.
The company expects further gains in both its general merchandise and coal traffic this year. Couple that with further productivity gains at NS and another good year can be expected, Goode told the analysts.
Railway operating revenues for the year were up 5 percent, but railway operating expenses also were up, 2 percent. The only expense category showing a decline was compensation and benefits, which dropped $19.4 million for the year, partly due to declines in health-care costs and in stock issued to employees, said Hank Wolfe, NS's executive vice president for finance.
Henry Watts, executive vice president for marketing, told the analysts that NS had set net revenue records in six of its eight commodity groups in 1994. Revenue from general merchandise traffic was up 5 percent, from coal up 4 percent and from intermodal shipments - those that move by more than one form of transportation - up 9 percent.
Agriculture has become a growth business for NS, largely attributable to record revenues from grain movements, Watts said. The movement of agricultural fertilizers also boosted the railroad's chemical transportation business, he said.
NS's revenues from hauling automobiles was up over $3 million from 1993 to the highest level in the railroad's history even though some auto plants on NS lines were closed for retooling.
Industrial development efforts along NS lines have resulted in new and expanded businesses that will provide the railroad with $100 million yearly in new revenue, Watts said.
In answer to a question, Watts said NS sees a continuation of the growth in the economy evident in the fourth quarter of 1994 spilling over into the first two quarters of 1995 with a slowdown in the second half of this year possible if consumers cut back on spending.
"What we have been seeing recently is a lot of underlying strength across all our commodities," Goode added.
The fourth quarter was NS's first billion-dollar quarter in rail revenues, which were a record and up 7 percent from a year earlier. Railway operating revenues for the year of $3.92 billion also were a record.
NS's operating ratio - the percentage of revenues that go toward operating the railroad - was a record low 73.4 last year compared with 75.6 in 1993.
by CNB