THE VIRGINIAN-PILOT
Copyright (c) 1995, Landmark Communications, Inc.
DATE: Thursday, July 27, 1995 TAG: 9507270501
SECTION: BUSINESS PAGE: D1 EDITION: FINAL
SOURCE: BY CHRISTOPHER DINSMORE, STAFF WRITER
LENGTH: Medium: 52 lines
The record heat has most people scurrying for air-conditioned comfort, and that's good news for one corporate executive in a corner office of a downtown Norfolk office tower.
The railroad that David R. Goode runs feeds the electric utilities that power air-conditioning units throughout the Southeast.
For Norfolk Southern Corp., the heat means renewed demand for coal shipments. And that's a welcome relief for the Norfolk-based Fortune 500 firm, which counts on coal shipments for nearly a third of its freight revenues.
``The mild weather has now blessedly stopped,'' the chairman and chief executive said during a conference Wednesday with stock analysts on the the railroad's second-quarter earnings.
Despite mild weather in the winter and spring that depressed coal revenues 3 percent, Norfolk Southern reported record second-quarter earnings of $181.2 million, or $1.38 per share, up from $178.5 million, or $1.30 per share.
In Wednesday trading on the New York Stock Exchange, Norfolk Southern stock slipped 1/8 to $72 1/4 per share.
The increased earnings are the result of revenue growth in nearly every other category of merchandise the railroad hauls. Long considered a coal railroad, Norfolk Southern is proving it is less reliant on coal.
Earlier this year, Norfolk Southern's coal exports were below last year's poor results, but bounced back in June to pull ahead less than 1 percent.
``While export coal started recovering for us a little bit later than we had hoped, we now think the recovery trend is under way as we see strong year to year numbers in July as well,'' Goode said.
Norfolk Southern's total revenues were $1.19 billion in the quarter ended June 30, up from $1.16 billion a year ago. Growth in the movement of autos and paper and forest products helped drive the revenue gain. A 6 percent improvement in revenues at its once-troubled motor carrier subsidiary, North American Van Lines, also contributed.
But the biggest revenue gainer were intermodal shipments of truck trailers and containers. Revenues in that area climbed 12 percent in the quarter to $118.7 million, even as other railroads posted weak intermodal results for the spring.
``We are aggressively, and profitably, increasing our share of the intermodal market,'' Goode said.
Norfolk Southern employs about 1,600 people in Hampton Roads between its headquarters and operations such as Portlock switching yard in Chesapeake and the Pier 6 coal terminal at Lambert's Point in Norfolk. by CNB