OMAHA, Neb. (AP) — Norfolk Southern railroad is optimistic about the economy as fourth-quarter profit rose 24 percent despite weak coal demand.
Norfolk Southern says its total shipping volume grew 4 percent as it delivered more autos, crude oil and agriculture products. Coal shipments fell 8 percent.
The railroad predicted that shipments of most products it hauls will increase in 2014, but coal will likely remain weak as utilities rely more on cheap natural gas.
Norfolk Southern's stock gained $5.46, or 6.2 percent, to $94.17 Wednesday after fourth-quarter results beat Wall Street expectations.
One of the fastest-growing segments of the railroad business has been crude oil shipments because of the drilling boom in North America. But several fiery derailments over the past year, including one that killed 47 in Canada last summer, have raised safety concerns about those shipments.
CEO Wick Moorman said the rail industry is working with oil producers to improve safety. Railroads may change the way they route crude oil trains and impose speed restrictions. He said railroads are working with regulators and the owners of the tank cars that carry crude oil to improve standards for the cars. Safety experts say the workhorse tank car railroads use is prone to splitting open during derailments.
Norfolk Southern runs about 20,000 miles of track in 22 states and Washington D.C.
The Norfolk, Va., railroad reported net income of $513 million, or $1.64 per share, in the quarter. That's up from $413 million, or $1.30 per share, a year earlier.
The railroad's revenue grew 7 percent to $2.88 billion.
Analysts surveyed by FactSet expected earnings per share of $1.51 on $2.85 billion revenue.
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Norfolk Southern Corp.: www.nscorp.com