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Strong winter storms and a soft economy slowed Norfolk Southern Corp.’s traffic in the first quarter. Carloads fell 4 percent compared with first-quarter 2006.

As a result, NS’ quarterly revenue and income tumbled, too. Operating revenue decreased 2 percent to $2.2 billion, income from railway operations declined 4.2 percent to $528 million, and net income dropped 7 percent to $285 million compared with first-quarter 2006. General merchandise revenue totaled $1.2 billion, down 4 percent, coal revenue remained flat at $557 million, and intermodal revenue totaled $462 million, down 1 percent.

In a first-quarter financial release issued today, NS also reported lower quarterly earnings and a slightly higher operating ratio. Diluted earnings per share fell slightly from 72 cents a year ago to 71 cents in the first quarter, and the railroad’s operating ratio worsened 0.4 points to 76.5.

The railroad posted progress in one financial segment however: operating expenses. First-quarter railway operating expenses decreased 2 percent to $1.7 billion compared with last year. Lower compensation and benefit expenses helped offset additional costs associated with severe winter storms.

“We are encouraged with our performance in the first quarter, especially in light of the softness in the economy,” said NS Chairman, President and Chief Executive Officer Wick Moorman in a prepared statement. “We are continuing to manage our cost structure and drive further efficiencies in our operation.”