Norfolk Southern Q3 profit up 32% despite flat rail volume
OMAHA, Neb. (AP) — Norfolk Southern's third-quarter profit jumped 32% even though the number of shipments the railroad delivered remained relatively flat because it was able to increase prices on most categories of freight.
The railroad said it earned $753 million, $3.06 per share, in the quarter. That's up from $569 million, or $2.22 per share, a year ago when the results were weighed down by a one-time $99 million charge. Without that Norfolk Southern's profits were up 17%.
The results exceeded Wall Street expectations. The average estimate of six analysts surveyed by Zacks Investment Research was for earnings of $2.89 per share.
The railroad's revenue grew 14% to $2.85 billion, which also topped analysts' forecasts. Three analysts surveyed by Zacks expected $2.74 billion.
Most categories of shipments were up during the quarter, but volume was still flat overall because of a sharp 23% decline in automotive shipments and a 4% decline in intermodal shipments. The auto industry is struggling to maintain production because of the shortage of computer chips, and intermodal shipments of containers that come off ships before being hauled by railroads and delivered by trucks slipped because of the snarled supply chain.
“In the midst of significant supply chain disruptions and labor shortages across the country, we’re delivering upon our commitments,” Norfolk Southern CEO Jim Squires said.
The railroad tweaked its outlook for the year to call for at least 12% growth in revenue. Previously, it had just predicted a 12% increase.
A year ago, shipping volume plummeted during the second quarter as restrictions related to the coronavirus pandemic slowed the economy to a crawl before rebounding sharply in the second half of 2020 as those restrictions were being lifted.
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