Norfolk Southern reported Tuesday third-quarter net income of $303 million, or 81 cents per diluted share, down almost 42% from $520 million, or $1.37 per diluted share, in the comparable third quarter of 2008. Revenue of $2.1 billion fell 29% from year-ago levels, which NS attributed primarily to a 20% falloff in traffic volume and fuel-related revenue. However, NS’s railway operating expenses for the quarter were $1.5 billion, a decrease of 25% over the same period of 2008. Its railway operating ratio was 72.8%, compared with 69.1% during the third quarter of 2008.
“While our third-quarter results reflect the continuing weak economy, they also show Norfolk Southern's resilience and the strength of our franchise," said Norfolk Southern CEO Wick Moorman. “By controlling costs and maintaining service levels, we are managing through this economic downturn and will emerge an even stronger company.”
NS’s results drew positive comments from some Wall Street analysts. “NS’s favorable outlook with respect to key pillars of our Attractive Industry View is likely to stabilize and support rail shares,” said Morgan Stanley & Co. Inc.'s William Greene, Adam Longson, and John Godyn. “In contrast to the relatively less favorable outlook issued by the Western rails, NS management commentary was positive on both pricing and volume trends in addition to expected productivity gains.”
In early afternoon trading Wednesday on the New York Stock Exchange, shares of Norfolk Southern were up roughly $1.00, or more than 2%.