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Norfolk Southern Corp. warned investors yesterday after the markets closed that it expects first-quarter 2015 diluted earnings per share of $1, down 15 percent from the same quarter in 2014. NS expects first-quarter revenue will be $2.6 billion, a 5 percent decrease compared with first-quarter 2014. Coal shipments were down due to a significant decline in export coal volume. Although merchandise volume grew, revenue fell because of unfavorable revenue per unit brought on by reduced fuel revenue and changes in traffic mix, company officials said in a press release.Higher intermodal volumes and core pricing gains helped offset the impact of lower average revenue per unit due to fuel revenue reductions.NS officials noted that the company does not forecast earnings, and yesterday's announcement is not intended to change that policy. The company will report its quarterly results during its previously scheduled April 29 earnings release and conference call.Expenses for the quarter are expected to total $2 billion, down 3 percent versus 2014. Lower fuel expenses helped trim expenses. Other costs were affected by weather and service recovery, as well as by increased hiring and training, and a labor agreement signing bonus.Except for coal, volumes are expected to rebound in the second quarter. Coal volumes will continue to feel the pressure of the current market dynamics. In the current energy environment, revenue for the year is expected to be less than in 2014. The company will continue to "focus on improving core pricing as service levels improve," NS officials said.Service levels are expected to gradually improve in the second quarter and return to normal levels in the third and fourth quarters. "Our goal remains the same: to operate an efficient, high velocity railroad, which enables us to offer the best possible customer service and retain and grow our business at rates that provide a superior return for our owners," said Chairman and Chief Executive Officer Wick Moorman. "I am confident in our ability to reach high performance levels this year. With operations showing sustained improvements, and with better weather and enhanced infrastructure and personnel, we look forward to stronger results in the second quarter and the second half of the year."
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