Norfolk Southern Misses Q2 Views

reported weaker-than-expected results for the second quarter on Monday. The Norfolk, Virginia-based company reported quarterly net income of $433 million, or $1.41 per share, compared to $562 million, or $1.79 per share, in the year-ago period. Its revenue slipped to $2.71 billion from $3 billion. However, analysts were expecting earnings of $1.42 per share on revenue of $2.79 billion. The average estimate among 16 Estimize users was for earnings of $1.45 per share and revenue of $2.8 billion. General merchandise revenue dropped 5 percent year-over-year to $1.6 billion in the quarter, while intermodal revenue slipped 3 percent to $633 million. Its coal revenue declined 33 percent to $453 million. Railway operating expenses shrank 6 percent to $1.9 billion for the quarter. Operating expenses as a percentage of revenue widened to 70.0 percent in the latest quarter, versus 66.5 percent in the year-ago quarter. "While we face short-term pressure, particularly as we clear fuel surcharge revenue and coal headwinds, Norfolk Southern is well positioned to continue improving service, which will reduce costs and add value to our customers," said CEO James A. Squires. "Growth within the intermodal franchise, consumer spending, housing-related momentum and improved manufacturing activity all support an optimistic longer-term outlook. We have a strong legacy of success, and we are taking the right steps to continue value creation for our customers, the communities we serve, our employees, and our shareholders." Norfolk Southern shares closed down 0.19 percent at $82.80 during regular trading hours.