NORFOLK, Va. (AP) — Norfolk Southern executives are optimistic about the economy after delivering a 21 percent rise in second-quarter profit as the railroad hauled more freight.
"We believe that the U.S. economy will continue to recover at a reasonable although not robust level for the balance of this year and next which will also help us to continue our upward momentum," CEO Wick Moorman said.
The Norfolk, Virginia-based railroad reported net income of $562 million, or $1.79 per share, in the quarter. That's up from $465 million, or $1.46 per share, a year ago. The average per-share estimate of analysts surveyed by FactSet was for earnings of $1.74.
The railroad said revenue climbed 8.6 percent to $3.04 billion from $2.8 billion in the same quarter a year ago, and beat Wall Street forecasts. Analysts expected $3.03 billion, according to FactSet.
The number of containers of imported goods, cars, coal, grain and raw materials railroads haul is considered an indicator of the health of the economy, so Norfolk Southern's 8 percent volume growth is a positive signal.
Edward Jones analyst Logan Purk said some of the volume growth likely came from shipments that couldn't move in the first quarter because of the severe cold that slowed railroads earlier this year. But the results were still better than expected.
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