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Rail News Home Financials

7/23/2003



Rail News: Financials

Coal pick-up propels NS to quarterly operating revenue record


Nothing like a little coal-fired revenue growth to blow down those fuel-cost blues.

Aided largely by burgeoning coal business, Norfolk Southern Corp. posted second-quarter net income of $137 million, a 15 percent increase compared with $119 million for the same 2002 period. The Class I recorded operating revenue of $1.63 billion, the highest of any quarter in NS history and a 3 percent increase compared with the $1.59 billion for the same 2002 period.

"We produced better results despite continued economic slowness in the quarter and considerable downward pressure on general merchandise traffic," said Chairman, President and Chief Executive Officer David Goode in a prepared statement. "The quality of our transportation continues to improve due to the strength of our operating plan and our ability to operate a high-service railroad in a tough economy."

For the quarter, coal revenue climbed 11 percent, to $389 million, compared with the same 2002 period. An increase in utility shipments as power companies replenished stockpiles drove the increase, NS said.

The Class I also posted gains in intermodal, agricultural, and paper and forest products revenue. For the quarter, NS recorded intermodal revenue of $300 million, a 2 percent increase compared with the same 2002 period and a quarterly revenue record. Strong international business and the successful conversion of new truck-competitive, transcontinental interline services propelled the increase, NS said. Boosted by an increase in fertilizer and grain shipments, agricultural revenue represented NS's largest percentage gain, growing 12 percent compared with the same period a year ago. In addition, paper and forest products revenue grew 6 percent.

Meanwhile, NS posted general merchandise revenue of $944 million, which was down slightly — particularly in the automotive, metals and construction and chemical commodity sectors — compared with the same 2002 period.

For the quarter, operating expenses increased 5 percent compared with the same 2002 period, primarily due to increased compensation and benefits, higher diesel fuel costs and increased casualty and other claims costs. NS recorded a second-quarter operating ratio of 81.8, compared with 79.8 for the same 2002 period.


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