Norfolk Southern Investors Encouraged By Q4 Results, New Cut Costing Initiatives - Norfolk Southern (NYSE:NSC)

Shares of

Norfolk Southern Corp.NSC

were trading higher by nearly 1.50 percent late Wednesday morning as investors positively reacted to the company's

fourth quarter results and an announcement of a new cost cutting initiatives. Norfolk Southern said that it earned $1.20 per share in the fourth quarter on revenue of $2.518 billion. Wall Street analysts were expecting the company to earn $1.23 per share on revenue of $2.57 billion. Net income for the quarter fell to $361 million from $511 million in the same quarter a year ago. For the full fiscal year 2015, net income fell to $1.6 billion from $2.0 billion in 2014. "We are implementing a plan to reduce costs and enhance profitable growth," said James A. Squires, Norfolk Southern's chairman, president and CEO. "This plan will enable us to achieve significant annual expense savings beginning in 2016 without compromising the company's ability to capitalize on volume and revenue growth opportunities. We are making progress despite a challenging operating environment, including successfully restoring our rail service to previous high levels, realigning resources, and completing strategic capacity investments to improve efficiency and productivity. Cost Cutting Details As part of the

new cost reduction initiative

, Norfolk Southern will reduce its total headcount by 2,000 employees by 2020, decrease overtime by 50 percent from 2015 levels, reduce employee levels in areas affected by lower coal traffic, consolidate operating regions from 3 to 2, halt or reduce operations in several hump or secondary yards in 2016 and dispose of or downgrade 1,500 miles of secondary lines by 2020. "While Norfolk Southern's fourth-quarter results do not yet reflect the initiatives under way, we believe we have the right strategic plan to streamline operations, accelerate growth, and enhance value for shareholders," Squires also said. "The plan leverages our core competencies in customer service and reliability, while also improving network efficiency and consolidating operations. Importantly, through disciplined cost control, we believe we can achieve the productivity savings outlined in this plan, and even more."

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