Jan. 22 (Bloomberg) -- Norfolk Southern Corp., the second- largest U.S. eastern railroad, posted fourth-quarter profit that topped analysts’ estimates as container-car shipments curbed the effects of falling coal revenue.
Net income dropped 14 percent to $413 million, or $1.30 a share, from $480 million, or $1.42 a year earlier, the Norfolk, Virginia-based company said today in a statement. That topped the average estimate of $1.19 from 27 analysts surveyed by Bloomberg.
Profit at Norfolk Southern, which got 31 percent of its 2011 revenue from coal, has been pressured as utilities switch to cheaper natural gas and the European economic slump trims metallurgical exports. Coal cargoes at the largest North American rail carriers fell about 14 percent in the quarter, and 11 percent at Norfolk Southern, according to data from the Association of American Railroads.
“If you look outside of coal, they have shown very strong growth,” Walter Spracklin, a Toronto-based analyst at Royal Bank of Canada, said in a telephone interview. “Intermodal is a bright star in Norfolk Southern’s portfolio.”
Revenue from coal in the fourth quarter dropped 23 percent to $657 million, as coal carloads fell 13 percent, Norfolk Southern said today. Container-shipment sales climbed 5 percent to $584 million, while volumes rose 4 percent.
Total sales fell 4 percent to $2.68 billion, compared with the average estimate from analysts of $2.67 billion.
--Editors: James Langford, Niamh Ring