OMAHA, Neb. (AP) - Norfolk Southern's fourth-quarter profit improved slightly even though it hauled 1% less freight because the railroad controlled expenses tightly as the economy continued to slowly recover from last year's widespread shutdowns during the coronavirus pandemic.
The Norfolk, Virginia-based company said it earned $671 million, or $2.64 per share, during the fourth quarter. That was up 1% from the previous year when it reported $666 million profit, or $2.55 per share.
The results topped Wall Street expectations. The average estimate of seven analysts surveyed by Zacks Investment Research was for earnings of $2.48 per share.
The railroad said revenue declined 4% to $2.57 billion in the period as volume slipped, which also beat Street forecasts. Four analysts surveyed by Zacks expected $2.56 billion.
Over the next year, railroad officials said they expect revenue to grow 9% as volume grows by a percentage in the upper single digits overall. Norfolk Southern expects shipments related to consumer demand, such as containers of imported goods, to remain strong while manufacturers continue to slowly improve.
Norfolk Southern said it hauled fewer shipments during the fourth quarter than last year even though the economy has improved significantly since the worst of the business shutdowns. During last year's second quarter, the railroad's volume plunged 26% as most automotive plants and many other manufacturers closed temporarily to help limit the spread of the virus before rebounding sharply in the third quarter.
"As t past year unfolded, change was one of the few constants, driven by the COVID-19 pandemic as well as a global shift in energy markets that significantly impacted our business," CEO Jim Squires said.
Norfolk Southern said it cut expenses 8% during the quarter to $1.6 billion as it continued to work to improve efficiency. The railroad is in the midst of reforming its operations to run on a tighter schedule and move more freight with fewer people.
Citi research analyst Christian Wetherbee said the railroad's revenue and expenses were both better than expected as Norfolk Southern delivered solid results.
For the year, the company said its profit fell 26% to $2.01 billion, or $7.84 per share, but this year's results were weighed down by two one-time charges. Revenue was reported as $9.79 billion.
In morning trading, shares of the company declined less than 1% to $237.42.
Norfolk Southern operates about 19,500 miles (31382.21 kilometers) of track in 22 eastern states and the District of Columbia