OMAHA, Nebraska — Norfolk Southern third-quarter profit fell 19 percent as the railroad hauled 3 percent less freight and restructured some of its operations in response to slowing traffic.
President and CEO James Squires said Wednesday that weak demand will linger in the fourth quarter, but he predicted profits should improve next year.
"We are confident that with a reasonably stable economy and our own intense focus on service, returns and growth, we are poised for better results," Squires said.
The Norfolk, Virginia-based railroad earned $452 million, or $1.49 per share, in the quarter. That's down from $559 million, or $1.79 per share, a year ago.
The profit per share exceeded the $1.41 per share that analysts surveyed by Zacks Investment Research expected.
Revenue fell 10 percent to $2.71 billion, but topped the forecast of $2.7 billion.
The railroad's coal revenue dropped 23 percent to $482 million. Norfolk Southern has taken roughly 300 miles of track primarily used for coal out of service over the past 18 months in response to the lower volume.
In addition to the coal weakness, revenue from metals and construction shipments fell 20 percent to $330 million, and intermodal shipment revenue declined 7 percent to $621 million.
Restructuring costs of $37 million also reduced Norfolk Southern's quarterly profits by 8 cents per share.
The railroad's shares rose $4.22, or 5.5 percent, to $81.66 in afternoon trading Wednesday. Norfolk Southern shares have fallen more than 26 percent in the last 12 months.
Norfolk Southern Corp. operates 20,000 miles of track in 22 eastern states and the District of Columbia.
Elements of this story were generated by Automated Insights (http://automatedinsights.com/ap) using data from Zacks Investment Research. Access a Zacks stock report on NSC at http://www.zacks.com/ap/NSC
Keywords: Norfolk Southern, Earnings Report