UPDATE 1-Norfolk Southern profit up despite coal drop
* Q2 EPS $1.60 vs $1.53 Wall Street view
* Revenue flat at $2.9 bln
* General merchandise, autos, intermodal offset coal revenue
* Utility coal orders starting to increase
July 24 (Reuters) - Railroad company Norfolk Southern Corp reported a higher quarterly profit and flat revenue, with increased general merchandise and intermodal revenue offsetting a double-digit drop in revenue from coal.
The coal business remains challenging, but utilities are burning off some of this stockpile to power air conditioners and starting to increase coal shipments again, Norfolk Southern executives told analysts on a conference call.
Coal shipments to utilities fell as winter weather and low natural gas prices caused their existing stockpiles to grow.
"With much higher temperatures across our utility network, and with some mitigation in natural gas prices recently, we are beginning to see some customers add train sets and increase orders of coal," said Don Seale, chief marketing officer at Norfolk Southern.
Coal revenue fell 15 percent in the second quarter from a year earlier. Revenue rose 9 percent for general merchandise shipments, which includes automobile and chemicals shipments, while revenue rose 4 percent for intermodal deliveries.
Intermodal refers to shipping goods in containers that can be moved from one form of transportation to another, such as from train to truck or train to ship.
The three other major U.S. railroads - Union Pacific Corp , CSX Corp and Kansas City Southern - all reported last week that generally beat profit forecasts as auto and intermodal shipments helped offset the big coal volume slump.
Norfolk Southern, the third-largest publicly held U.S. railroad, on Tuesday reported earnings rose 3 percent to $1.60 per share. That beat the average estimate of $1.53, according to Thomson Reuters I/B/E/S.
Net income of $524 million, was down 6 percent from $557 million a year ago. Net income a year ago reflected $63 million, or 18 cents per share, from non-recurring, income tax-related benefits.
Quarterly operating revenue for the Norfolk, Virginia-based company were flat at $2.9 billion, and in line with estimates.
Norfolk Southern's shares were unchanged at $71.96 in after-hours trading.