Friday, August 06, 2010

Norfolk Southern 2Q profit surges; hiring resumes

The following is an Associated Press (AP) article from July 27, 2010, found on the web. It serves as preface to the following 3 postings which are email announcements from Norfolk Southern.

Norfolk Southern 2nd-qtr profit surges on higher volume and prices; railroad hiring again

Samantha Bomkamp, AP Transportation Writer, On Tuesday July 27, 2010, 6:15 pm EDT

NEW YORK (AP) -- Railroad Norfolk Southern Corp. said Tuesday that second-quarter earnings surged 59 percent, as shipments increased, prices rose and efficiency improved in the recovering economy.

In another positive sign, the company said it's brought back nearly all the employees furloughed during the recession. It's also hiring some employees in areas where business is best. It still has about 8,000 rail cars in storage, compared with about 35,000 at the peak of the recession.

"Looking ahead, while we share the common concerns about the ongoing strength of the recovery, our traffic levels remain strong," CEO Wick Moorman said.

Norfolk Southern expects shipping volume improvements to remain steady throughout the year. Shipments jumped 22 percent in the second quarter, for a fourth straight quarter of volume growth.

The Norfolk, Va., company earned $392 million, or $1.04 per share, compared with $247 million, or 66 cents per share a year earlier.

Revenue rose 31 percent to $2.43 billion.

Thomson Reuters says analysts forecast a profit of 99 cents per share on revenue of $2.40 billion.

Moorman said he is "optimistic about continued year-over-year increases in rail traffic."

Railroads are gauges of the nation's broader economic health because they carry a wide range of goods for consumers and businesses.

Sales in Norfolk Southern's biggest category -- general merchandise -- which includes everything from lumber to cars, rose 31 percent to $1.3 billion. Revenue from shipments of coal, used to generate electricity and make steel, increased by 36 percent. The company predicts coal shipments for utilities, which is the bulk of the railroad's coal business, should improve as electricity consumption rises this year.

Norfolk Southern also projects strong shipments of autos for the rest of the year, with new models from Ford and other vehicle manufacturers keeping demand strong.

Also on Tuesday the company raised its dividend by 6 percent and said its board approved the repurchase of up to 50 million additional shares of its stock through 2014.

The eastern railroad's rival, CSX Corp., reported second-quarter earnings earlier this month. It said a "dynamic" U.S. economy, combined with an improvement in shipping volume and higher prices, drove its profit up 36 percent.

Norfolk Southern operates about 21,000 miles of rail in 22 states and the District of Columbia.

In aftermarket trading Norfolk Southern shares fell 98 cents, almost 2 percent, to $55.54 after closing down 64 cents at $56.52 in the regular session.