Norfolk Southern earnings rise, revenue up

Norfolk Southern Corp. announced Tuesday that its first-quarter profit rose 45 percent from the same quarter a year ago, as the effects of the global recession eased.

Net income was $257 million, or 68 cents a share, for the quarter that ended March 31, up from $177 million, or 47 cents a share, in the first quarter of 2009. The earnings beat Wall Street projections by 2 cents a share. The average earnings-per-share estimate of analysts surveyed by Bloomberg News was 66 cents.

Norfolk Southern's operating revenues for the first quarter rose 15 percent to $2.2 billion, from $1.9 billion in the same quarter last year.

It was the first time in 15 months that the Norfolk-based railroad, the nation's fourth-largest, was able to announce a year-over-year increase in net income. That last occurred on Jan. 27, 2009, when it reported fourth-quarter 2008 profit jumped 13 percent.

For all four quarters of 2009, profit decreases ranged from 32 percent to 45 percent.

"Looking ahead, we are increasingly convinced that the domestic economic recovery is well under way, although the rate of growth is still somewhat unclear," Norfolk Southern CEO Wick Moorman told Wall Street analysts in a teleconference late Tuesday. "...We saw a big upsurge in business in March, and while some of that was clearly catch-up from a snowbound February, we are very encouraged that our April volumes have continued to be strong."

Quarterly revenues were up across all of the railroad's business segments:

--General merchandise rose to $1.2 billion, a 23 percent increase from $975 million in the same quarter a year ago.

--Coal climbed to $629 million from $602 million last year, a 4.5 percent increase.

--Intermodal, involving the shipment of truck trailers and shipping containers, was up 12 percent, rising to $410 million from $366 million in the same quarter last year.

Norfolk Southern released its earnings after the close of trading on the New York Stock Exchange. In trading Tuesday, its stock fell $1.44 a share, closing at $59.65.

On Thursday, Union Pacific, the nation's largest railroad, reported that its net income for the first quarter rose 43 percent, to $516 million from $362 million in the same quarter a year ago. Revenue grew 16 percent, to $3.96 billion.

On April 13, CSX Corp., the third-largest, reported that first-quarter net earnings jumped 24 percent compared with the same quarter a year ago, to $306 million from $246 million. Revenue grew 11 percent, to $2.49 billion.

Burlington Northern Santa Fe, the second-largest, was acquired by Warren Buffett's Berkshire Hathaway Inc. earlier this year and no longer releases its own earnings.

Berkshire Hathaway's first-quarter earnings are expected to be announced early next month.

Norfolk Southern operates roughly 21,000 route miles in 22 states and the District of Columbia and serves every major container port in the eastern United States, including Hampton Roads. Earlier Tuesday, the railroad announced the regular quarterly dividend of 34 cents per share on its common stock, payable on June 10, to stockholders of record on May 7.

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Norfolk Southern Facilitates $3.1 Billion in Industrial Investment Along Rail Lines in 2009

Norfolk Southern Corporation in the location of 70 new industries and the expansion of 23 existing industries along its rail lines in 2009.

New plants and expansions represented an investment of more than $3.1 billion by Norfolk Southern customers and are expected to create 3,000 jobs in the railroad's territory, eventually generating more than 138,500 carloads of new rail traffic annually.

Norfolk Southern assisted state and local government and economic development officials throughout 19 states in helping customers identify ideal locations for new and expanded facilities.

"The energy sector anchored our results during 2009," said Newell Baker, assistant vice president industrial development. "Our group assisted in the location or expansion of 24 energy related facilities in 12 states across our service area. Ethanol production and distribution accounted for the lion's share of energy projects, with 11 new and expanded facilities that began to receive NS rail service in 2009."

The balance of other projects secured during 2009 was distributed among several of the broad product areas Norfolk Southern serves.

Norfolk Southern works with state and local economic development authorities on projects involving site location and development of infrastructure to connect customers to its rail system and provides free and confidential plant location services, including industrial park planning, site layout, track design, and logistics assistance. During the past 10 years, Norfolk Southern's Industrial Development Department has participated in the location or expansion of 1,084 facilities, representing an investment of $23.9 billion and creating nearly 50,000 customer jobs in the territory served by the railroad.

Norfolk Southern Corporation ( NSC) is one of the nation's premier transportation companies. Its Norfolk Southern Railway subsidiary operates approximately 21,000 route miles in 22 states and the District of Columbia, serving every major container port in the eastern United States and providing efficient connections to western rail carriers. Norfolk Southern operates the most extensive intermodal network in the East and is North America's largest rail carrier of metals and automotive products.

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Two sue N-S railroad for $13.5M

Two men who suffered injuries in separate mishaps while employees of Norfolk Southern Railway Co. have filed civil actions in Mingo County, seeking judgments totaling $13.5 million.

Carl L. Felts, who was employed by the defendant railway company as a trackman/machine operator, seeks $10 million judgment and costs in a suit filed Jan. 11, 2010 in the Mingo County Circuit Court clerk’s office.

Richard A. Saunders was employed as a conductor and was engaged in the performance of his duties as such worker at the time he was caused to be injured. His suit, filed Dec. 8, 2009 in Mingo County, asks for judgment against the defendant in a sum of $3.5 million.

Gregory M. Tobin of Pratt & Tobin, P.C., East Alton, Ill., is attorney for both Felts and Saunders, who are West Virginia residents.

#Felts’ complaint said Norfolk Southern Railway was engaged in the business of interstate commerce prior to and at the time of the accident, which occurred Dec. 13, 2007 at or near Sutton Township, Ohio.

The complaint states that Felts was engaged in the course of his employment when his vehicle was struck by another vehicle, causing him to be severely and permanently injured in whole or in part. The plaintiff alleges the mishap occurred due to the carelessness and negligence of defendant.

Felts alleges Norfolk Southern violated the Federal Employers’ Liability Acts by failing to furnish the plaintiff with reasonably necessary and proper equipment and personal protective equipment; proper supervision in the performance of his assigned duties, and failing to warn him of reasonably foreseeable hazardous conditions existing with defendant’s equipment.

The suit of Felts also alleges the defendant allowed unsafe practices to become the standard practice; assigned the plaintiff work plaintiff should have known would result in injury; failed to provide a reasonably safe place to work and did not provide reasonably safe methods of work.

Felts’ suit alleges he sustained severe and permanent injuries to his head, spine, leg and body, resulting in disability and disfigurement. He also claims to have suffered great pain and mental anguish, lost past and future earnings and will in future be obligated for medical aid and attention.

Saunders’ complaint is worded similarly to that of Felts with regard to the plaintiff’s duties as an employee of the plaintiffs and alleged failures regarding proper equipment, employee supervision, etc.

The plaintiff’s suit states that on or about July 21, 2009, Saunders was engaged in the course of his employment with the defendant railway company at or near Wharncliffe, Mingo County. A train derailed and struck a building on which plaintiff was positioned, causing the building to collapse.

Saunders alleges he sustained severe and permanent injuries to his neck, back, shoulder, knee and body, resulting in disability and disfigurement. His future earning capacity has been seriously diminished.

He asks judgment of $3.5 million and for costs of the suit. Both Saunders and Felts demand a trial by jury in each case.

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Railroad shipping: Norfolk Southern's Crescent Corridor receives strong bipartisan support

Class I railroad carrier Norfolk Southern's Crescent Corridor received bipartisan endorsement from 60 legislators, the company said earlier today.

Launched in June 2007, the Crescent Corridor is a nearly $2.5 billion public-private partnership (PPP) to build a rail corridor spanning from Louisiana to New Jersey. NS officials said this endeavor will expand and improve its rail network from the northeast to the southeast, expedite the delivery of cargo shipments, and reduce highway congestion by diverting truck traffic. When it is completed, NS said it will stretch across 2,500 miles from New Orleans to Newark, N.J. and run through New Jersey, Pennsylvania, Virginia, Maryland, North Carolina, South Carolina, Tennessee, Georgia, Alabama, and Louisiana.

"Norfolk Southern's Crescent Corridor program comes at a critical time for our nation's economy, environment, and transportation infrastructure," said NS CEO Wick Moorman in a statement. "The Crescent Corridor will stimulate job growth, economic development, and local tax revenues, while delivering substantial public benefits for communities and shippers. We are grateful for the wide bipartisan support the Crescent Corridor is receiving on Capitol Hill."

The Crescent Corridor's first phase is expected to be completed by 2013, according to NS officials.

NS cited the following as benefits of the Crescent Corridor upon its completion:
-$326 million in tax revenues to states and communities;
-1.3 million long-haul trucks diverted from interstates;
-$146 million in accident avoidance savings;
-1.9 million tons in CO2 reduction;
-$575 million in congestion savings;
-$92 million in highway maintenance savings; and
-169 million gallons in fuel savings.

In September, the state of Pennsylvania, the lead state on its Crescent Corridor endeavor, submitted an application for $300 million in federal funding to receive financial assistance with Crescent Corridor.

The funding the state of Pennsylvania applied for was submitted as "The Crescent Corridor Intermodal Freight Application," and it is for federal stimulus that is part of the American Recovery and Reinvestment Act of 2009 Transportation Investment Generating Economic Recovery (TIGER) Program. Introduced by U.S. Transportation Secretary Ray LaHood in February, TIGER's objective is to ensure that economic recovery funding is rapidly made available for transportation infrastructure projects and that project spending is monitored and transparent.

NS officials said this application seeks $300 million for new intermodal facilities at Memphis, Birmingham, and Franklin County, Pennsylvania, as well as the expansion of intermodal terminals in Harrisburg and Philadelphia. They added that track improvements in the five partner states will be comprised of ten passing tracks, 557 individual speed improvements, and 393 miles of track with upgraded rail improvements.

In terms of current developments regarding the Crescent Corridor, Rudy Husband, NS spokesman, told LM that NS is currently working with state DOT's in Alabama, Tennessee, and Pennsylvania on new terminal projects in Birmingham, Memphis, and Greencastle, Pa., as well as expanding existing terminals, in Harrisburg, Pa. and Philadelphia.

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Conveyor problems halt coal shipments from Norfolk Southern terminal

Two mishaps at Norfolk Southern Corp.'s Lamberts Point Coal Terminal in Norfolk brought coal shipments to a halt over the weekend.

On Saturday, an overheated bearing ignited a fire on a couple of rollers on the coal conveyors, said Robin Chapman, a spokesman for the Norfolk-based railroad. The fire melted a hole in the rubber conveyor belt, shutting down that ship loader. Then Sunday, the conveyor belt on the second coal loader ripped apart, rendering that unit useless, Chapman said.

The company is repairing both conveyors and expects to restore service at both loaders by Thursday, he said. The mishaps came a week after winter storms in Kentucky, West Virginia and western Virginia slowed delivery of coal to the Lamberts Point terminal.

Norfolk Southern sent out a notice Tuesday morning that "force majeure" was still in effect on coal shipments, referring to a contractual clause that exempts the company from liability if weather or other natural events prevent delivery of coal.

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