Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: THURSDAY, October 26, 1995 TAG: 9510260032
SECTION: BUSINESS PAGE: B-8 EDITION: METRO
SOURCE: GREG EDWARDS STAFF WRITER
DATELINE: LENGTH: Medium
The Norfolk-based company, which operates 14,600 miles of railroad in 20 states and Ontario, Canada, and owns North American Van Lines, said it completed a record nine months as well, riding on the strength of the third-quarter results.
It not only was the best third quarter in the company's 13-year history ``by virtually any measure,'' but in terms of both net income and earnings per share, it was the best quarter ever, David Goode, NS' chairman, president and chief executive officer, told securities analysts in New York on Wednesday morning.
NS' net income for the quarter was $183.9 million, compared with $168.3 million in the third quarter last year. Earnings per share were $1.40, an increase of 13 percent from last year's third quarter. The company's earnings per share for the first nine months - $4.07 - have been reached only twice before over a full year.
Setting records is getting to be a habit for Norfolk Southern, which employs more than 3,000 people at maintenance shops and offices in the Roanoke Valley. Goode noted that during five of the last seven quarters, NS has reported record profits.
Goode said that despite slow growth in the U.S. economy and sluggishness in the Southeast, NS set a new third-quarter record for operating revenues of $996 million, 2 percent ahead of last year.
NS' revenues from merchandise freight were up 4 percent and those from intermodal freight, which moves by more than one form of transportation, were up 9 percent. Revenues from overall coal traffic were down 2 percent, but export shipments at the company's coal pier in Norfolk were up 19 percent from last year.
``The overall gains in revenue in the third quarter were enhanced by our unrelenting efforts to improve productivity and efficiency," Goode said. Expenses for NS' railway operations increased 1 percent in the quarter. The revenue improvements demonstrate the diversity of NS' business, he said.
NS' compensation and benefits expenses increased in the quarter because of higher wage rates, health care costs, and compensation linked to the company's stock price, which increased during the quarter, said Henry Wolf, NS' executive vice president for finance.
However, other expenses, such as materials, services and rents, declined, in part because of better use of equipment and changes in freight-car maintenance, including the closing of car repair shops in Tennessee and South Carolina, he said.
Steve Tobias, executive vice president for operations, said the company is making better use of its freight cars and by the end of the first quarter of next year should have disposed of 17,000 freight cars the company designated as surplus a year ago.
Looking ahead to this year's final quarter, Goode said NS expects moderate gains in its merchandise freight traffic and revenue as well as some improvement in its coal business.
``We share the belief that the widely anticipated `soft landing' of the U.S. economy has been achieved,'' he said.
The company will incur some expense in the fourth quarter for an early-retirement plan for salaried workers that was announced in September, but how much it will be has not been determined, Goode said. Employees can sign up for the program through Friday.
NS stock closed at $76.73 a share in trading Wednesday on the New York Stock Exchange, down $1.12 1/2 a share from Tuesday.
by CNB