OMAHA, Neb. – Norfolk Southern’s first-quarter profit fell 18 per cent as severe winter weather slowed the railroad’s shipments and coal revenue dropped 15 per cent.
The Norfolk, Virginia, railroad earned $368 million, or $1.17 per share, during the January-March period. That’s down from $450 million, or $1.41 per share, a year ago.
Last year’s results were helped by a one-time $60 million real estate gain that boosted profits by 19 cents per share.
Analysts surveyed by FactSet expected earnings per share of $1.15 for the latest quarter.
Revenue declined 2 per cent to $2.69 billion. Analysts expected $2.739 billion.
Declines in automotive, construction and forest product shipments offset increases in crude oil and liquefied petroleum gas shipments, so Norfolk Southern’s merchandise shipments declined 1 per cent.
Coal shipments fell 13 per cent as export shipments declined and Norfolk Southern lost a utility delivery contract.
Intermodal shipments, which refer to shipping containers that are moved from ships to trucks and trains, were a bright spot for Norfolk Southern. Intermodal shipments grew 3 per cent in the quarter.
Norfolk Southern shares fell $1.74, or nearly 2 per cent, to $95.18 in midday trading Wednesday.
The extreme cold and heavy snow that fell this winter forced railroads to use shorter trains because air brakes are less effective in the cold, employ more locomotives, add workers and keep some equipment running nonstop.
“We had what I would describe as a solid quarter given the weather across our service territory,” CEO Wick Moorman said.
The results are similar to the 14 per cent drop in profits CSX railroad reported last week. Edward Jones analyst Logan Purk said both of the eastern railroads — Norfolk Southern and CSX — were hit hard by the severe winter weather and weak demand for coal exports.
“The northeast got the brunt of the severe winter weather, and that’s primarily where Norfolk Southern and CSX operate,” Purk said.
Union Pacific fared better and delivered a 14 per cent improvement in quarterly profit despite the weather, but its rail network crosses 23 Midwestern and Western states.
Norfolk Southern Corp. operates about 20,000 miles of track in 22 states and the District of Columbia.
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Norfolk Southern Corp.: www.nscorp.com