OMAHA, Neb. — Norfolk Southern’s second-quarter profit surged 23 percent as the railroad hauled 6 percent more freight and coal demand increased.
The Norfolk, Virginia, railroad said Wednesday that it earned $497 million, or $1.71 per share, in the quarter. That’s up from $405 million, or $1.36 per share, a year ago.
The results topped the $1.64 that the analysts surveyed by Zacks Investment Research had expected.
Norfolk Southern CEO Jim Squires said the railroad decided to increase its budget for repurchasing stock this year by 25 percent to $1 billion because of the strong results.
The railroad’s revenue increased 7 percent to $2.64 billion in the period, which matched Street forecasts.
Norfolk Southern said its coal revenue grew 32 percent to $447 million, and revenue from intermodal shipments increased 10 percent to $593 million.
Norfolk Southern continues working to reduce its expenses by $650 million and improve efficiency by 2020. The railroad expects to cut more than $100 million of costs this year after trimming $250 million in expenses last year.
“I thought the numbers were really solid,” Edward Jones analyst Dan Sherman said.
Norfolk Southern executives said they won a small amount of shipping business away from rival CSX Corp. this year because that railroad is in the midst of a major restructuring under new CEO Hunter Harrison.
Sherman said it will be interesting to see how the two railroads fare against each other over the next couple of years after CSX completes its restructuring, which is more aggressive than Norfolk Southern’s cost-cutting plan. Many shipping contracts are several years long.
Norfolk Southern’s shares have climbed 10 percent since the beginning of the year, while the Standard & Poor’s 500 index has increased 11 percent. The stock has climbed 29 percent in the last 12 months.
The stock fell 3 percent, or $3.72, to sell for $115.27 on Wednesday.
Norfolk Southern Corp. operates about 20,000 miles of track in 22 states and the District of Columbia.
Elements of this story were generated by Automated Insights (http://automatedinsights.com/ap) using data from Zacks Investment Research. Access a Zacks stock report on NSC at https://www.zacks.com/ap/NSC
Keywords: Norfolk Southern, Earnings Report