Norfolk Southern Corp. (NSC) reported a first quarter earnings of $257 million or 68 cents per share. Excluding a health-care related charge, earnings came in at 75 cents per share. The earnings were ahead of the Zacks Consensus Estimate of 67 cents. The results also compare favorably with the prior-year quarter earnings of $177 million, or 47 cents per share.

The beat was driven by a solid increase in revenues across all its categories. Railway operating revenues were up 15% to $2.2 billion. The increase primarily stemmed from a 9% growth in traffic volume. Norfolk experienced a 23% increase in general merchandise revenues, a 4% increase in coal revenues and a 12% increase in intermodal revenues.

Despite Norfolk’s efforts to control costs, the company reported an 8% year-over-year increase in operating expenses to $1.7 billion. It was driven by higher fuel expenses, which were up by $95 million or 60%, mainly due to price increases.

Norfolk reported a 45% year-over-year increase in income from railway operations to $555 million.

The company recorded a $27 million or 7 cents per share deferred tax charge in the reported quarter. This resulted from the enactment of the recent healthcare legislation. This legislation, effective in 2013, removes the tax deduction available for prescription drug expenses reimbursed under the Medicare Part D retiree drug subsidy program.

Norfolk joins railroad companies such as Union Pacific Corp. (UNP) and CSX Corporation (CSX) in reporting solid first quarter earnings above the Zacks Consensus Estimate.

Union Pacific Corp.’s first-quarter earnings of $1.01 per share were ahead of the Zacks Consensus Estimate of 95 cents. The results in the reported quarter primarily benefited from increased operating revenues due to a growth in business volumes.

CSX Corporation’s first quarter earnings of 78 cents per share were ahead of the Zacks Consensus Estimate of 69 cents. Results were aided by increased revenues due to volume improvement in chemicals, agricultural products, metals, fertilizers and automotives in the wake of the improving economy.

Yesterday, Norfolk also announced a regular quarterly dividend of 34 cents per share on its common stock, payable on June 10, to stockholders of record on May 7.
Read the full analyst report on “NSC”
Read the full analyst report on “UNP”
Read the full analyst report on “CSX”
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