THE VIRGINIAN-PILOT
Copyright (c) 1996, Landmark Communications, Inc.
DATE: Thursday, January 25, 1996 TAG: 9601250380
SECTION: BUSINESS PAGE: D1 EDITION: FINAL
SOURCE: STAFF AND WIRE REPORTS
LENGTH: Medium: 71 lines
Norfolk Southern Corp. posted its highest profits ever in 1995, the Norfolk-based transportation company said Wednesday.
While most other major railroads struggled for profits amid a slow economy in late 1995, Norfolk Southern kept a lid on expenses, which was welcomed at the bottom line when total transportation revenues, including its truck line, increased only about 2 percent last year.
Helped by a drive to improve productivity, Norfolk Southern, a 29,000-employee company that operates on 14,500 miles of track in 20 states and Canada, reported 1995 profits of $712.7 million, or $5.44 per share of stock. That compares to 1994 after-tax profits of $667.8 million, or $4.90 a share.
Net income for the fourth quarter was $176.9 million, compared with $176.1 million a year earlier. Earnings per share were $1.37, up 5 percent from 1994's fourth quarter. Norfolk Southern shares closed Wednesday at 78 1/2, up 1 1/8 in trading on the New York Stock Exchange.
Norfolk Southern chairman David R. Goode and a handful of the company's top executives briefed transportation analysts Wednesday in New York about future plans and 1995 operations. Goode singled out the railroad as a prime factor in the company's record profits.
``Railway operating revenues for the year topped $4 billion for the first time in our history,'' said Goode, who also serves as president and chief executive officer.
North American Van Lines, the truck line, reported a 1995 operating income of $24.5 million on revenue of $656 million.
Goode said 1996 has gotten off to a slow start with the blizzard and flooding, but he expects the economy will rebound. The company, which operates a major coal loading facility in Norfolk, wants to haul more coal for export to power plants abroad.
``We're a very small player in the export steam market,'' Goode said. ``We'd like to change that. We're going to make a really strong effort with our producers to see if we can't crack that market.''
Norfolk Southern's record profits were achieved despite a fourth-quarter after-tax charge of $20.4 million, or 16 cents a share, for an early retirement program.
Without the early retirement charge, the fourth quarter's per-share earnings would have been $1.53 and net income would have been $197.3 million, the company said.
Goode said strength in transportation operations ``and our relentless focus on productivity improvements continued to drive these good results.''
The cost of operating the company's transportation units was $3.54 billion last year, about even with the $3.51 billion spent the year before.
The company plans to spend $708 million on capital improvements this year, compared with $695 million planned for 1995.
On Tuesday, Norfolk Southern's board voted to raise the company's dividend nearly 8 percent and to buy back up to 23 percent of its stock.
The stock repurchase expands a program used since 1987. Through the end of last year, Norfolk Southern had spent about $2.9 billion to buy back 63.9 million shares.
The board authorized the purchase of up to 30 million more shares by 2000. The company has about 129 million shares outstanding on the New York Stock Exchange. MEMO: Staff writer Mylene Mangalindan, Bloomberg Business News and the
Associated Press contributed to this report.
by CNB