NORFOLK, Va. (AP) — Norfolk Southern Corp., the nation's third largest railroad, said Tuesday that its second-quarter earnings jumped as higher revenue offset a 60 percent increase in fuel costs.
The Norfolk, Va., company said net income of $557 million, or $1.56 per share, was a record for the April-to-June quarter. That compared with $392 million, or $1.04 per share, a year ago.
Railway operating revenue rose to $2.87 billion from $2.43 billion as the company saw increased business across its markets.
The results included one-time, tax-related gains totaling $63 million, or 18 cents a share.
Analysts, who generally don't include one-time items, expected earnings of $1.28 per share on revenue of $2.75 billion, according to FactSet.
Revenue for shipments of general merchandise, which includes consumer goods, totaled $1.4 billion, 12 percent higher than the year-ago quarter, while coal shipment revenue rose 28 percent to $893 million. Intermodal revenue — transfers between trucks and trains — increased 20 percent to $540 million.
Expenses also rose. Fuel costs jumped to $412 million, compared to $258 million a year ago.
Norfolk Southern is the latest of the major rails to report significant earnings growth. CSX Corp. on July 19 said second-quarter earnings rose 22 percent as the railroad made up for slow volume growth by charging higher prices. And Union Pacific last week recorded a 10 percent jump in second-quarter profit. Revenue increased 16 percent to $4.86 billion.
Economists view the performance of railroads as one of the indicators of the nation's economic health, since railroads transport a variety of things from businesses across the country. Recent signs that the manufacturing sector is slowly improving are part of that picture. Earlier this month the Institute for Supply Management said the manufacturing sector expanded in June for the 23rd consecutive month. And carmakers reported higher sales in June as well.
Norfolk Southern, which operates in 22 states and the District of Columbia, serves major container ports in the eastern U.S.
Norfolk Southern released earnings after the markets closed. Its stock fell 90 cents to close at $75.55 in the regular session. It rose $1.05 in after-hours trading.