THE VIRGINIAN-PILOT
Copyright (c) 1995, Landmark Communications, Inc.
DATE: Thursday, April 27, 1995 TAG: 9504270371
SECTION: BUSINESS PAGE: D6 EDITION: FINAL
SOURCE: BY CHRISTOPHER DINSMORE, STAFF WRITER
LENGTH: Medium: 70 lines
Despite weaker revenues from coal shipments, Norfolk Southern Corp. recorded its best first quarter ever, thanks to strong gains in other markets.
Traditionally regarded as a coal railroad, it was intermodal shipments - the movements of shipping containers and truck trailers by rail - that led Norfolk Southern's growth.
The Norfolk-based company made $170.7 million in the quarter ended March 31, up from $144.9 million in the same period last year. Per-share earnings rose to $1.29 from $1.05 last year.
First-quarter revenues increased 6 percent to $1.14 billion from $1.08 billion last year. Revenues from intermodal shipments increased 18 percent.
Revenues from coal shipments, which accounted for about 26 percent of the company's total revenues, were down 2 percent.
``Coal traffic was up 4 percent, but total coal revenues were off slightly last year,'' David R. Goode, the railroad's chairman and chief executive, told stock analysts at a Wednesday meeting in New York.
More-normal weather conditions should help boost domestic coal traffic in 1995, company officials said.
Exports of coal through Norfolk Southern's Pier 6 terminal at Lamberts Point in Norfolk did not rebound as much as had been anticipated. Coal exports are an important piece of the railroad's business in Hampton Roads, where it employs nearly 1,500 people.
Coal exports at the terminal were up just 1 percent to 6.1 million tons from last year's dismal first quarter. Railroad officials expect export coal to strengthen later this year.
Norfolk Southern's first-quarter earnings were boosted by a one-time gain of $18.8 million, or 14 cents per share, from a partial sale of its stake in the real estate partnership that owns First Union Corp.'s headquarters building in Charlotte.
``I must emphasize, however, that our operating performance was responsible for our first-quarter results,'' Goode said. ``Both net income and earnings per share would have been first-quarter records even without the Charlotte gain.''
Another area of strength for the railroad was shipments of metals and autos. Metals revenues were up 17 percent due in part to new plants located on Norfolk Southern rail lines, said D.H. Watts, Norfolk Southern's executive vice president-marketing. Automotive-shipment revenues improved 11 percent, despite soft first-quarter auto sales because of high interest rates.
``Much of our first-quarter auto traffic growth came from our high concentration of traffic with Ford,'' Watts said. ``Ford's auto sales remain strong.''
The railroad's other merchandise segments - chemicals, agriculture and wood and paper - grew as well.
The dramatic growth in intermodal traffic can be traced to several new services the railroad started last year, including a daily train from Mississippi to Dallas in cooperation with Kansas City Southern Railway, the opening of a terminal in Kansas City with connections to western railroads and a train to Miami run with the Florida East Coast Railway. The Canadian rail and port strike in March also contributed to the gain in intermodal business, Watts said.
The first-quarter earnings exceeded the $1.23 per share average estimate of rail stock analysts. In trading on the New York Stock Exchange, Norfolk Southern stock slipped one-quarter to $65 3/4 per share.
Norfolk Southern's regular quarterly dividend of 52 cents per share will be paid June 10 to shareholders of record May 5. by CNB