UPDATE 1-Norfolk Southern profit falls 11 pct as coal use drops
July 23 (Reuters) - Norfolk Southern Corp on Tuesday reported a 11 percent drop in quarterly profit, as demand to ship coal fell, to send shares down 1 percent after the bell.
For the second quarter Norfolk, the country's third-largest railroad, earned $465 million, or $1.46 a share, on revenue of $2.8 billion. A year ago, Norfolk Southern reported $524 million net income, or $1.60 per share, on revenue of $2.87 billion.
Analysts, on average, expected $1.49, according to Thomson Reuters I/B/E/S.
Revenue from coal shipments was $626 million, down 17 percent from a year earlier.
Railroads like Norfolk and CSX Corp have seen big drops in coal shipments in the past two years as utilities switched to natural gas as natural gas prices dropped.
Norfolk and CSX traditionally transport coal from the Appalachian region in the eastern United States. CSX, which reported higher second-quarter earnings earlier this month, said coal shipment revenue fell 6 percent.
However, like CSX, Norfolk shipped more chemicals, automotive parts and also saw its intermodal business do well.
Intermodal is the shipping of containers that can be moved from one form of transport to another, such as from train to ship or to truck. Those revenues rose 4 percent to $588 million for Norfolk.
Investors consider U.S. rail traffic trends an indicator of economic health, because of the breadth of goods freight trains carry.
Shares of Norfolk Southern, which operates about 20,000 route miles, closed at $76.87 on Tuesday on the New York Stock Exchange, traded at $75.85 after the bell.
Earlier today, the company raised its quarterly dividend by 4 percent to 52 cents per share.
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