NEW YORK (AP) — Railroad operator Norfolk Southern Corp. said Wednesday "economic momentum" continued in the last three months of 2009, but not enough to prevent a steep decline in its fourth-quarter earnings.
Norfolk Southern, based in Norfolk, Va., said fourth-quarter profit fell 32 percent to $307 million, or 82 cents per share, compared with $452 million, or $1.21 per share a year earlier.
Revenue dropped 16 percent to $2.11 billion.
Analysts surveyed by Thomson Reuters on average expected profit of 84 cents per share on revenue of $2.12 billion.
The fourth largest railroad in the nation says shipping volume should grow in most of its business segments this year as global conditions improve. It expects to raise prices by about the same amount it did in 2009 — between 4 and 6 percent.
Shipments of coal showed the most dramatic drop in the fourth quarter, with revenue down 27 percent from a year ago. Coal demand has dwindled as industrial production slowed and some power plants switched to natural gas to produce electricity. Demand has also fallen for coal used to make steel.
Norfolk Southern sees coal shipments improving next year, at least for metallurgical coal used in making steel. Shipments of other products used in construction — lumber and paper — should also rise.
Sales for intermodal shipments, which involve goods transferred between trains and trucks, fell 15 percent in the recent quarter. Intermodal shipments are closely linked to consumer spending because they include many everyday items such as toys, clothing and other goods.
Revenue in Norfolk Southern's biggest segment — general merchandise — which includes shipments of everything from cars to food products, fell 9 percent to $1.1 billion.
Railroads are considered important indicators of the nation's broader economic health because so many consumer and industrial goods are shipped on the tracks.
Shares of Norfolk Southern fell 43 cents in aftermarket trading to $50. In the regular session, the stock gained 68 cents to close at $50.43.
