THE VIRGINIAN-PILOT
Copyright (c) 1995, Landmark Communications, Inc.
DATE: Thursday, January 26, 1995 TAG: 9501260363
SECTION: BUSINESS PAGE: D1 EDITION: FINAL
SOURCE: BY CHRISTOPHER DINSMORE, STAFF WRITER
DATELINE: NEW YORK LENGTH: Medium: 68 lines
Norfolk Southern Corp. reported record revenue and operating profit in the fourth quarter and all of 1994 at an industry-analysts conference Wednesday.
The Norfolk-based railroad company benefited from increased freight traffic and an ongoing effort to rein in costs and boost productivity.
Norfolk Southern beat its previous quarterly earnings record set in 1994's second quarter by making $176.1 million, or $1.31 per share, in the fourth quarter. That's a 10.5 percent increase over the $159.4 million, or $1.15 per share, it made in 1993's fourth quarter.
``Our strong fourth-quarter performance put an appropriate cap on our record 1994,'' said David R. Goode, Norfolk Southern chairman, president and chief executive.
Its earnings beat the estimates of most analysts who follow the railroad. Consensus estimates were about $1.29 per share.
Graeme Anne Lidgerwood of the brokerage firm CS First Boston had anticipated earnings of about $1.24 per share.
``It was just another outstanding quarter for Norfolk Southern,'' Lidgerwood said. ``Once again they beat my numbers.''
She attributes the performance to cost control. ``They did a better job of containing costs than I expected they would.''
Norfolk Southern's stock rose $1 per share Wednesday to $63 1/2 per share in trading on the New York Stock Exchange.
Norfolk Southern's railroad subsidiary produced more than $1 billion in quarterly revenue for the first time. Combined with the trucking subsidiary, revenues in the quarter were $1.17 billion, up from $1.09 billion in the same quarter in 1993.
For all of 1994, Norfolk Southern made $667.8 million, or $4.90 per share. That's a record from an operating standpoint, but lower than 1993's income, which was supplemented by some one-time tax gains.
Norfolk Southern made $772 million, or $5.54 per share, in 1993, including a $243.5 million reduction due to a change in accounting for retirement benefits and a $466.8 million gain related to income taxes. Without those one-time changes, Norfolk Southern made $548.7 million, or $3.94 per share, from operations in 1993.
Annual revenues rose 2.8 percent to $4.58 million from $4.46 million in 1993. The annual operating expense ratio was a record 73.4 percent, compared with 75.6 percent in 1993.
The company's 1994 earnings show the strength of its transportation franchise, Goode said. It did not post any gains from the sale of assets or one-time accounting changes in 1994, he said.
North American Van Lines, its trucking subsidiary, contributed a $22.1 million profit to its parent's earnings for the year. The troubled subsidiary, based in Fort Wayne, Ind., was substantially restructured in 1993. As a result, trucking revenues declined 7.1 percent to $663.2 million.
The railroad continued to have strong gains in revenue and carloads in most of its key commodities, including slight gains in its lucrative coal business.
Coal exports, particularly through its Lamberts Point coal loading terminal in Norfolk, continued to be weak, but the improving international economy is expected to turn that around in 1995. Demand from domestic utilities accounted for most of 1994's increase in coal shipments.
The railroad also continued to take business away from trucks. The railroad had more than 1.1 million intermodal shipments in 1994, up from about 994,700 in 1993. Intermodal freight is shipped in containers that can be transported by rail, truck and ship. by CNB