Lower coal, goods volume cuts Norfolk Southern forecast
(Reuters) - Railroad company Norfolk Southern Corp (NSC.N) said weaker shipments of coal and merchandise as well as lower fuel surcharge revenue would reduce its third-quarter earnings from a year earlier.
Shares of Norfolk Southern, the country's third-largest railroad, fell 5.5 percent in after-hours trading to $68.96 after the company forecast quarterly profit between $1.18 and $1.25 per share.
Analysts, on average, expected $1.63 per share, according to Thomson Reuters I/B/E/S.
A year ago, the Norfolk, Virginia-based company reported $1.59 per share.
Lower coal and merchandise deliveries were offset partly by higher intermodal volume but likely reduced revenue by about $120 million from a year ago, the company said in a statement.
A mild winter and shift to low-cost natural gas have boosted stockpiles of coal at utilities, cutting demand for new shipments.
Norfolk Southern also said its fuel surcharge revenue is expected to be about $80 million lower in the third quarter than a year earlier.
The lower profit forecast also hit other railroad company shares. No. 1 U.S. railroad company Union Pacific (UNP.N) fell 2.6 percent in after-hours trading, CSX Corp (CSX.N) dropped more than 4 percent and Kansas City Southern (KSU.N) declined 1.5 percent.
Norfolk Southern reports third-quarter results after the market close on October 23. It said it will further discuss its third-quarter performance at a Citi conference on Thursday.
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