* 1st-qtr EPS exceeds Wall Street estimates
* Coal revenue was down 17 percent
* Intermodal revenues climbed 9 percent
By Nivedita Bhattacharjee
April 23 Coal shipments by Norfolk Southern Corp
fell sharply in the first quarter, but the U.S. railroad
still posted a higher profit on increased transport of goods.
Donald Seale, chief marketing officer, said domestic demand
for coal, a key part of Norfolk's business, is expected to stay
weak in the near future as electric utilities replace coal with
cleaner, low-cost natural gas.
Norfolk competes with CSX Corp regionally, and both
railroads traditionally get a lot of business from transporting
coal in the Appalachian region of the eastern United States.
"Coal is diminishing in volume, but the rails would gladly
take more coal as the market demands. It remains over 20 percent
of sales (for most railroads) and it is higher margin than most
other commodities," said Keith Schoonmaker, an analyst with
Coal revenue was down 17 percent in the quarter for Norfolk,
due to lower prices and demand. Intermodal revenue climbed 9
Intermodal is the shipping of containers that can be moved
from one form of transport to another, such as from train to
Last week, CSX, the No. 2 U.S. railroad, posted a higher
quarterly profit as strong business in merchandise and
intermodal helped offset its struggles with the coal business.
For the first quarter, Norfolk, the country's third-largest
railroad, earned $450 million, or $1.41 a share. A year ago, the
Norfolk, Virginia-based company earned $1.23 a share.
Excluding a gain from a land sale, the company earned $1.22
a share, while Wall Street was expecting $1.17, as per Thomson
Railway operating revenue fell 2 percent to $2.74 billion.
However, shipment volume increased 3 percent.
Shares of the company traded at $75.50 after the bell on
Tuesday. They closed at $75.84 on the New York Stock Exchange.