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4/26/2006



Rail News: Financials

NS becomes sixth large road to report rise in first-quarter revenue, drop in operating ratio



Score the largest Class Is as six-for-six when it comes to banner first-quarter financial results. Today, Norfolk Southern Corp. — the last of the Big Six to release quarterly earnings — reported it generated record first-quarter operating revenue of $2.3 billion, a 17 percent increase compared with first-quarter 2005.

General merchandise revenue rose 18 percent to a record $1.3 billion, intermodal revenue increased 14 percent to an all-time first-quarter high $466 million and coal revenue went up 20 percent to $559 million.

In addition, quarterly net income of $305 million rose 57 percent, record income from railway operations of $551 million increased 37 percent and the railroad’s operating ratio of 76.1 — the lowest first-quarter ratio since the 1999 Conrail integration — improved 3.3 points.

“Demand for rail transportation remains healthy and our first-quarter results reflect solid execution throughout the enterprise,” said Wick Moorman, who led the Class I through his first full quarter as chief executive officer, in a prepared statement.

However, first-quarter operating expenses of $1.78billion increased 12 percent because of higher compensation and benefit costs, a 54 percent rise in diesel expenses and other costs associated with handling additional volumes during the quarter.


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