THE VIRGINIAN-PILOT
Copyright (c) 1996, Landmark Communications, Inc.
DATE: Wednesday, January 24, 1996 TAG: 9601240427
SECTION: BUSINESS PAGE: D2 EDITION: FINAL
SOURCE: BY CHRISTOPHER DINSMORE, STAFF WRITER
LENGTH: Short : 40 lines
The Norfolk Southern Corp. board of directors voted Tuesday to increase the railroad's dividend nearly 8 percent and buy back up to 23 percent of the company's stock.
The regular quarterly dividend was increased to 56 cents per share from 52 cents. The new dividend will be payable March 11 to shareholders of record Feb. 2.
``In view of our strong performance in 1995 and the favorable long-term outlook for Norfolk Southern, we believe a dividend increase and continuation of the stock purchase program will serve to enhance shareholder value,'' said David R. Goode, Norfolk Southern's chairman, president and chief executive.
Norfolk Southern is announcing its 1995 earnings today. Analysts expect the Norfolk-based railroad holding company to increase its per share earnings on average to about $5.50 a share from $4.90 a share in 1994.
Such strong earnings throws off a lot of cash the company needs to spend or invest. By repurchasing and then retiring its own stock, the company is investing in itself for its shareholders.
``It's a good way to invest our money,'' a spokesman said.
The stock repurchase plan expands a program the company has used since 1987 to increase shareholder value. Through the end of 1995, Norfolk Southern had spent about $2.9 billion to purchase 63.9 million shares of its stock.
The board authorized the repurchase of up to 30 million more shares by 2000. There are about 129 million Norfolk Southern shares outstanding on the New York Stock Exchange.
At Tuesday's closing share price of $77 3/8, 30 million shares would cost more than $2.3 billion.
Norfolk Southern will choose when to buy stock back based on market conditions and alternative investment opportunities. by CNB