Dallas, Texas 04/24/2014 (FINANCIALSTRENDS) – Norfolk Southern Corp. (NYSE:NSC) felt a chill on Wall Street as profits dropped 18% because of severe winter weather slowing down the railroad’s shipments.
The NSC Quarterly Report
Norfolk Southern’s first quarter earnings report showed a net income of $368 million, or $1.17 per diluted share. This doesn’t compare too well against the $450 million income, or $1.41 earnings per diluted share, that NSC reported in the same quarter last year.
The operating revenues of $2.7 billion were likewise 2% lower than the same quarter in 2013. Shipment volumes decreased by 1%, so it’s no big surprise that operating expenses for the first quarter were down 1% to $2 billion.
The biggest drop was in coal revenues, pegged at $451 million. This is 15% lower than the same quarter in 2013, and the drop is attributed primarily to lower export and utility shipments. That’s a half-truth, because the fact is that Norfolk actually lost a utility coal delivery contract. There’s a difference between losing a contract and shipping delays and lower shipping volumes caused by inclement weather. The company should make these facts clear in their earnings report.
To be fair, though, both the eastern railroads were hit just as hard in the first quarter by the cold weather and lower demand for coal exports. CSX Corporation (NYSE:CSX) reported a 14% decline in profits in its first quarter earnings report.
Statement by Norfolk Southern CEO Wick Moorman
“Following the extreme winter weather across the U.S. rail network which impacted first-quarter results, we are seeing a rebound in shipments across all of our business,” said Norfolk Southern CEO Wick Moorman. “Our people responded admirably to meet the challenges of the harsh conditions, and we remain focused on delivering superior service to our customers.”