Norfolk Southern posts record fourth-quarter profit; announces $2.2 billion capital plan for 2014

Norfolk Southern Corp. posted a record profit in fourth-quarter 2013, with net income soaring 24 percent to $513 million, or $1.64 per diluted share, compared with 2012’s fourth-quarter results.

The Class I also reported record railway operating revenue of $2.9 billion, a 7 percent increase; and record income from railway operations, which totaled $881 million, a 23 percent increase over 2012's fourth quarter.

Strong intermodal, chemical, automotive and agricultural shipments during the quarter more than offset declines in coal traffic to drive total volumes up 4 percent, company officials said during a teleconference this morning.

"Norfolk Southern's team of safety and service-oriented employees drove our record-setting fourth-quarter results through increased productivity, efficient network operations and continued revenue gains," NS Chief Executive Officer Wick Moorman said. "We're seeing the results of our investments in network capacity and technology enhance our ability to offer superior service to all of our customers."

For the full year, net income rose 9 percent to a record $1.9 billion, or $6.04 per diluted share, compared with $1.7 billion, or $5.37 per diluted share, in 2012. Railway operating revenue rose 2 percent to $11.2 million, driven by a 3 percent increase in traffic volume. General merchandise revenue rose 7 percent, and traffic volume increased by 4 percent for the year.

Coal revenue dropped 12 percent to $2.5 billion during 2013, due to a 5 percent decline in traffic volume compared with the same period in 2012. Growth in general merchandise and intermodal business helped offset the decline in coal, however.

The operating ratio for the year was 71.0, a one-point improvement over 2012, NS officials said.

For 2014, NS expects to pump up its capital program by 12 percent to $2.2 billion in order to maintain safe railway operations, purchase locomotives and freight cars, and support growth and productivity initiatives, company officials said. About $220 million of that spending will go toward positive train control.

"We are investing to grow the business and maintain all our assets in top-class condition," Moorman said.