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Despite higher third-quarter costs associated with Hurricane Katrina-damaged infrastructure, casualty claims and fuel, Norfolk Southern Corp. earned net income of $301 million, a 4.5 percent increase compared with third-quarter 2004. Net income rose 28 percent excluding a Conrail corporate reorganization gain that increased reported income by $53 million.

In addition, NS set a quarterly operating revenue record at $2.16 billion, a 16 percent increase compared with the same 2004 period. General merchandise and intermodal revenue rose 13 percent to $1.1 billion and 17 percent to $471 million, respectively. During the quarter, NS also set a coal-volume record at 451,000 carloads and increased coal revenue 22 percent to $546 million.

However, quarterly operating expenses of $1.63 billion rose 17 percent and NS’ operating ratio worsened 0.8 points to 75.5 compared with third-quarter 2004.

“These good results came from the effective response of our people to the challenges of the quarter and our ability to maintain service for our customers, while moving a record-setting 2 million carloads of traffic,” said NS Chairman and Chief Executive Officer David Goode in a prepared statement.

During 2005’s first nine months, NS’ revenue totaled $6.27 billion, a 17 percent increase compared with the same 2004 period. Revenue was driven by a 9 percent traffic volume increase, higher average revenues and fuel surcharges. In addition, NS’ net income rose 39 percent to a record $919 million and operating ratio improved 1.2 points to 75.7.

But operating expenses totaling $4.75 billion rose 15 percent compared with 2004’s first nine months.