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Rail News: Financials

NS sets quarterly high-water marks for revenue, income and carloads

For Norfolk Southern Corp., the second quarter was one for the record books. Operating revenue rose 11 percent to an all-time-high $2.4 billion, income from railway operations increased 14 percent to a record $677 million and carloads went up 4 percent — to a quarterly high 2 million units — compared with the same 2005 period.

General merchandise revenue rose 14 percent to $1.3 billion, coal revenue increased 1 percent to $584 million and intermodal climbed 16 percent to $497 million — all new quarterly records. NS now has registered revenue gains in 11-straight quarters.

Also during the second quarter, net income of $375 million increased 23 percent compared with same 2005 period, excluding the effects of Ohio tax legislation and settlement of two coal rate cases. NS’ quarterly operating ratio improved 0.8 points to 71.7 — the Class I’s best ratio since the 1999 Conrail integration.

However, railway operating expenses of $1.7 billion increased 10 percent compared with second-quarter 2005 primarily because of a $179 million rise in fuel costs, and higher casualties and other claims.

During the year’s first half, NS generated record railway operating revenue of $4.7 billion, up 14 percent compared with the same 2005 period. Net income rose 10 percent to an all-time-high $680 million and the railroad’s operating ratio improved 2 points to 73.8. But railway operating expenses increased 11 percent to $3.5 billion compared with first-half 2005, mostly because of rising fuel prices.

NS officials expect the company’s momentum to carryover to the year’s second half.

“As we approach the fall peak, we’re confident our operating efficiencies and investments in our network will help keep us at profitability,” said NS Chairman, President and Chief Executive Officer Wick Moorman at the railroad’s earnings conference this morning.

Contact Progressive Railroading editorial staff.

More News from 7/26/2006