Norfolk Southern 2Q profit up 43 percent as volume increases
Norfolk Southern's second-quarter profit raced ahead 43 percent as the railroad handled 6 percent more freight.
The company said Wednesday that it earned $710 million, or $2.50 per share, in the quarter. That's up from $497 million net income, or $1.71 per share a year ago.
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The results surpassed the $2.31 per share that Wall Street analysts surveyed by Zacks Investment Research expected on average.
"Our second-quarter results reflect strong growth in our business and our sustained commitment to improving financial performance," Norfolk Southern CEO Jim Squires said.
Norfolk Southern's revenue chugged up 10 percent to $2.9 billion in the quarter. The seven analysts surveyed by Zacks expected $2.85 billion.
The railroad, based in Norfolk, Virginia, was also helped by this year's corporate tax cuts. Norfolk Southern said it paid $214 million in taxes during the quarter, down from last year's $283 million.
Edward Jones analyst Dan Sherman said Norfolk Southern was able to increase prices while handling more shipments, and the railroad controlled costs well. Norfolk Southern's expenses increased 6 percent to $1.9 billion in the quarter.
Norfolk Southern said it expects the economy to remain strong in the second half of 2018 as consumer spending increases and the market for truck shipping remains tight.
Shares of Norfolk Southern Corp. have increased 11 percent since the beginning of the year, while the Standard & Poor's 500 index has increased 5.5 percent. The stock has increased 37 percent in the last 12 months.
Elements of this story were generated by Automated Insights using data from Zacks Investment Research. Access a Zacks stock report on NSC at https://www.zacks.com/ap/NSC
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