July 23 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
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
Investors consider U.S. rail traffic trends an indicator of
economic health, because of the breadth of goods freight trains
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.