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The
Atlanta-based railroad said Friday that it earned $547 million,
or $2.43 per share. That's down from $750 million, or $3.31 per
share, a year ago. The disastrous derailment in the small town
on the Ohio-Pennsylvania border has generally boosted earnings
in recent quarters as the railroad collected insurance payments,
but that wasn't the case this time, so it combined with planning
costs related to the merger, earnings per share were reduced by
22 cents. Last year's results were also helped by some land
sales.
Without those unusual costs, the railroad's profit would have
beat Wall Street estimates. The analysts surveyed by FactSet
Research predicted the railroad would earn $2.51 per share.
CEO Mark George said the railroad also dealt with the uncertain
economy that reduced the shipments it delivered by 1%, along
with severe weather and rapidly rising fuel costs.
“Despite these challenges, our employees safely delivered a
solid service product, managed costs effectively, and earned the
continued trust of our customers. As conditions improved, we
captured momentum exiting the quarter, reinforcing the strength
of our operating foundation and the dedication of the entire
Norfolk Southern team,” George said.
The railroad's revenue was relatively flat at just under $3
billion. But its expenses jumped 15% compared to last year when
insurance payments from the derailment added $185 million to
Norfolk Southern's bottom line.
Norfolk Southern is working with Union Pacific to update its
application to merge that the railroads plan to submit next
Thursday. The U.S. Surface Transportation Board rejected the
railroad’s first request to approve the $85 billion merger
because the regulators wanted more information. The STB hasn’t
yet decided whether the deal that would cut the number of major
freight railroads down to five will enhance competition.
Norfolk Southern operates trains all over the eastern United
States. Combining with Union Pacific's network west of the
Mississippi River would create the nation's first
transcontinental railroad.
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