Norfolk Southern Profit Climbed 31 Percent to $402 Million

Norfolk Southern earned a net profit of $402 million in the fourth quarter, a 31 percent gain compared with a year earlier, as revenue grew 14 percent to $2.4 billion, the railroad said Tuesday.

Railway operating expenses were $1.8 billion for the fourth quarter, 12 percent higher compared with the same period a year earlier.

Net profit for the year soared 45 percent to $1.5 billion as revenue grew 19 percent to $9.5 billion, the company said. For 2010, railway operating expenses were $6.8 billion, up 14 percent compared with 2009, primarily due to fuel expenses and higher costs associated with compensation and benefits.

By The Numbers: U.S. Rail Cargo

"During 2010 we profitably grew the business, invested in the franchise, generated significant levels of cash, and produced attractive returns for our shareholders," said CEO Wick Moorman. "We have every reason to believe that 2011 will be an even stronger year for us."

Gains in general merchandise revenue were relatively subdued in the fourth quarter, but coal and intermodal generated increases comparable to the rest of the year.

General merchandise revenue was $1.2 billion, up 10 percent compared with fourth-quarter 2009. For 2010, general merchandise revenue was $5 billion, 20 percent higher compared with 2009. General merchandise traffic volume increased 3 percent in the quarter and 14 percent for the year compared with the same periods of 2009.

Coal revenue in the fourth quarter was $685 million, up 18 percent compared with the same period last year. For 2010, coal revenue was $2.7 billion, 20 percent higher compared with 2009. Coal traffic volume increased 12 percent in the quarter and 10 percent for the year compared with the same periods of 2009.

Intermodal revenue was $471 million, up 16 percent compared with fourth-quarter 2009. For the year, intermodal revenue was $1.8 billion, up 17 percent compared with 2009. Intermodal traffic volume increased 13 percent in the fourth quarter and 16 percent for 2010 compared with the same periods of 2009.

Income from railway operations was $642 million for the fourth quarter, up 17 percent, and $2.7 billion for the year, up 36 percent, compared with the same periods of 2009.

The fourth-quarter railway operating ratio improved 1 percentage point to 73.2 percent compared with the same period last year. For 2010, the railway operating ratio improved 5 percentage points to 71.9 percent compared with 2009.

The Norfolk, Va.-based railway operates approximately 21,000 route miles in 22 states and the District of Columbia and serves every major container port in the eastern United States.

-- Contact Thomas L. Gallagher at tgallagher@joc.com.