NORFOLK SOUTHERN CONTINUES EARNINGS REBOUND

NORFOLK SOUTHERN CONTINUES EARNINGS REBOUND

   Norfolk Southern Corp., the fourth-largest U.S. railroad, reported third-quarter net income of $99 million, compared to $19 million in the year-earlier period.

   Results for the recent quarter included the sale of timber rights by several NS subsidiaries, which boosted net income by $46 million. Third-quarter 1999 results were impacted by a non-cash charge of $31 million for a “work incentive plan.”

   Operating income for the quarter rose 1 percent to $1.52 billion.

   “A slowdown in the economy, mild weather in Norfolk Southern's service region and a change in traffic mix reduced third-quarter railway operating revenues to lower-than-anticipated levels,” said David R. Goode, chairman and chief executive officer of NS.

   Intermodal revenues increased 7 percent to a record $287 million. Intermodal traffic was improved through new transcontinental traffic, the opening of Rutherford Yard near Harrisburg, Pa., and growth in premium service traffic, NS said.

   General merchandise revenue rose 1 percent to $869 million and automotive climbed 9 percent. Coal revenues fell 2 percent to $361 million, NS said, due to sluggish volume related to milder weather in the railroad's service region and mine production problems.

   Operating expenses for the quarter declined 4 percent, to $1.31 billion, despite a 50-percent increase in diesel fuel costs over year-earlier volumes. Operating ratio dropped to 86.1 percent, from 90.3 percent in the third quarter of 1999.

   For the January-September period, net income was $167 million. A $62-million work force reduction charge was offset by gains of $63 million on the sale of timber rights and other interests in oil and natural gas properties. Without the work force reduction charge, earnings for the first nine months of 2000 would have been $229 million, compared to $208 million for the year-earlier period, the railroad said.

   NS reduced its nonunion personnel through a voluntary early retirement program and reduced union personnel primarily through furloughs.

   Nine-month operating revenues were $4.59 billion, up 23 percent, while operating expenses    rose 30 percent to $4.07 billion, including the work force reduction charge. Operating ratio for the period was 86.5 percent, compared to 84.4 percent for the same period in 2000.