Norfolk Southern reports record revenue

TRANSPORTATION company Norfolk Southern has released its annual report for 2013 with a record revenue of $US11.2 billion ($A12.42 billion).
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Sadie Davidson

It is the company’s third consecutive year of $11 billion-plus revenues.

Net income in 2013 was up 9% and earnings per share were up 12%.

Total traffic volume was up 3% in 2013, despite a decline in coal shipments of 5%.

Coal was NS’ largest commodity group as measured by revenues, accounting for 23% of all railroad revenues for 2013.

The company handled 150.1 million short tons, or 1.3 million carloads, in 2013, most of which originated on the company lines from major eastern coal basins.

Coal revenues decreased $336 million or 12% compared to 2012.

It reflected a 5% decrease in car load volume primarily due to fewer shipments of utility and domestic metallurgical coal.

Average revenue per unit was down 7%, the result of lower pricing and decreased fuel surcharge revenue, partially offset by the positive effect of changes in mix.

For 2014, coal revenues are expected to decrease, although more modestly, due to fewer carloads and lower average revenue per unit.

Utility coal tonnage was down 4% in 2013 as compared to 2012.

Utility coal shipments in the southern region decreased due to lower demand as utility stockpiles remained high and natural gas prices remained low.

The decrease was partially offset by increased shipments in NS’ northern region as higher coal burn necessitated stockpile replenishments to maintain targeted levels.

Despite a 1% increase in 2013, export coal tonnage is expected to decrease in 2012 as a result of strong competition in the Western European metallurgical coal market, in addition to soft demand and an oversupply of thermal coal.

Domestic metallurgical coal tonnage was down 10% in 2013, compared with 2012, due to weaker domestic steel production and the permanent closure of a steel plant in mid-2012 that impacted the year-over-year comparison for the first half of 2013.

For 2014, domestic metallurgical coal tonnage is expected to be flat with 2013, as improved steel demand should offset losses due to sourcing shifts.

Industrial coal tonnage increased slightly in 2013, compared with 2012, as increased shipments to existing customers was partially offset by weaker industrial demand in the print paper and cement sectors.

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