ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Thursday, January 25, 1996 TAG: 9601250026
SECTION: BUSINESS PAGE: B-8 EDITION: METRO
SOURCE: GREG EDWARDS STAFF WRITER
Breaking financial records is beginning to sound like a broken record at Norfolk Southern Corp.
The Norfolk-based transportation company, which employs more than 3,000 Roanoke Valley workers, reported Wednesday that it had set records last year for earnings per share, net income and railway operating revenues. Record earnings per share also were announced for the fourth quarter, despite a slowdown in the growth of the nation's economy.
NS 1995 profit of $712.7 million was 7 percent ahead of the $667.8 million in net income reported for 1994. It set a record despite an after-tax charge of $20.4 million in the fourth quarter to pay for an early retirement program.
Speaking to securities analysts in New York Wednesday morning, Norfolk Southern Chairman, President and Chief Executive Officer David Goode attributed the results to tight control of costs, made more critical by the slowing economy at year's end. "Results show the benefits of our unending efforts to improve productivity and efficiency," Goode said.
Henry Wolf, NS' executive vice president for finance, said much of the credit goes to the hard work of employees.
Some of the efficiencies, however, involved shedding some of those same employees. Goode told the analysts that the railroad had cut its work force by 1,000 people last year and said more job cuts are planned for this year, although he declined to give specific numbers. Current employment at NS stands at 26,015, of which 23,566 work on the railroad.
Concerning the railroad's relationship with its labor unions, Goode said contract talks were entering a more serious phase and he was optimistic some agreements can be reached in the spring.
Although 1996 has gotten off to a slow start, partly because of the weather, Goode said he expected the economy to improve and for NS to show quarter-to-quarter improvement. He is basing those predictions on his most recent conversations with the railroad's customers, Goode said.
Goode said the railroad found it tough to increase its rates last year and he doesn't see good prospects for increases this year. "It's a tough economy. You have to scratch and claw for business," he said.
NS' coal revenues, which generally account for about 30 percent of total revenues, fell 2 percent during 1995 because of mild weather early in the year and increased output at nuclear power plants. But Ike Prillaman, executive vice president for marketing, said the market has stabilized and fourth quarter coal traffic showed an increase over 1994.
Looking ahead, Prillaman said the company was working to expand its domestic coal business and its export business for utility coal, where NS sees a good potential for growth in Europe.
LENGTH: Medium: 56 lines ILLUSTRATION: GRAPHIC: Chart by staff: Norfolk Southern Corp. color.by CNB