THE VIRGINIAN-PILOT
Copyright (c) 1994, Landmark Communications, Inc.
DATE: Thursday, October 27, 1994 TAG: 9410270430
SECTION: BUSINESS PAGE: D1 EDITION: FINAL
SOURCE: BY CHRISTOPHER DINSMORE, STAFF WRITER
LENGTH: Medium: 53 lines
Strong industrial productivity throughout its Eastern U.S. service area helped push Norfolk Southern Corp.'s earnings up 19 percent to $168.3 million in the third quarter, the railroad company announced Wednesday.
The Norfolk-based transportation firm reported substantial rail-freight revenue gains from shipments of coal, chemicals, metals and other construction materials, and, particularly, intermodal freight.
Railway operating revenues in the quarter ended Sept. 30 were $975.8 million, up 7 percent from 1993. It was Norfolk Southern's second-best quarter ever.
``These results reflect solid improvement in railway operating revenues, efficiency and cost control,'' said David R. Goode, Norfolk Southern chairman, president and chief executive.
The $168.3 million profit compares to income of $141.4 million in 1993's third quarter before a one-time charge of $46.2 million to cover last year's increase in the federal corporate-tax rate. Norfolk Southern actually made $95.2 million, or 69 cents per share, in the third quarter of 1993.
On a per-share basis, it made $1.24 in the most-recent quarter compared to $1.02 in the year-earlier quarter before the tax charge.
Including its North American Van Lines subsidiary, total transportation revenues were up 8 percent to $1.17 billion.
The trucking company contributed to the bottom line for the third quarter in a row, with an operating profit of $13.6 million. The troubled subsidiary, based in Fort Wayne, Ind., was substantially restructured last year.
Norfolk Southern's biggest transport commodity is coal and it showed improvement in the third quarter. The increase was driven mostly by demand for coal by power utilities, said D. Henry Watts, Norfolk Southern executive vice president of marketing.
Norfolk Southern highlighted the dramatic growth it's seen in intermodal freight shipments at an analysts meeting in New York on Wednesday. Intermodal freight is shipped in containers that may be carried by rail, truck or ships.
Intermodal is the railroad's fastest growing business line. Revenue from intermodal was up 14 percent in the third quarter thanks in part to rising demand that is pushing up the price the railroad can charge, even as its costs decrease, Watts said.
Norfolk Southern also continued to boast the strongest operating ratio in the railroad industry. Its railroad expenses ate up 73.9 percent of its railroad revenues in the first nine months of the year, putting Norfolk Southern on track to beat its 1988 record of 74.1 percent.
The industry as a whole reported an operating ratio of 89.3 percent in 1992, according to the Association of American Railroads. by CNB