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Rail News: Rail Industry Trends

Solid Q1 results reflect economic improvement, NS and CP say


Class Is are posting better financial results in first-quarter 2010 vs. the same 2009 period thanks to an improved economy, officials say. Norfolk Southern Corp. and Canadian Pacific are the latest two to do so.

Yesterday, NS announced its operating revenue rose 15 percent to $2.2 billion, income from railway operations shot up 45 percent to $555 million and net income skyrocketed 45 percent to $257 million. The railroad’s operating ratio improved 5.1 points to 75.2.

“Norfolk Southern delivered strong financial performance during the first quarter, reflecting positive trends in the economy,” said NS Chairman, President and CEO Wick Moorman in a prepared statement. “Demand for rail transportation continues to grow in most sectors of our business. We remain confident that many of the cost efficiencies we have achieved will remain in place as we continue to invest in key projects and new business opportunities.”

NS’ General merchandise revenue rose 23 percent to $1.2 billion, intermodal revenue increased 12 percent to $410 million and coal revenue rose 4 percent to $629 million.

However, operating expenses rose 8 percent to $1.7 billion, primarily because of higher fuel costs, which rose by $95 million or 60 percent.

CP posted improved first-quarter results, as well. The Class I’s net income shot up 74 percent to $100 million, total revenue rose 4 percent to $1.2 billion and operating income increased 55 percent to $205 million. Meanwhile, operating expenses dropped 2 percent to $962 million. The railroad’s operating ratio improved 570 basis points to 82.4.

“We put in a solid performance this quarter and our results reflect both improvements in the economy and CP’s proven ability to rapidly adjust to changes in our customers’ demands,” said President and CEO Fred Green.

Contact Progressive Railroading editorial staff.

More News from 4/28/2010