OMAHA, Neb. (AP) - Norfolk Southern's third-quarter profit chugged ahead by 39 percent as the railroad hauled 5 percent more freight and benefited from this year's tax cuts.
The Norfolk, Virginia, company earned $702 million, or $2.52 per share. That's up from $506 million, or $1.75 per share, a year ago, and better than the per-shares earnings of $2.44 that Wall Street was looking for, according to analysts surveyed by Zacks Investment Research.
Norfolk Southern CEO Jim Squires said the results show the railroad is continuing to make progress in cutting costs and improving profitability.
"Norfolk Southern continues to deliver record financial results that reflect our careful and determined pursuit of a balanced and flexible strategy," Squires said.
But Norfolk Southern Corp. faces tough comparisons its rival in the eastern United States, CSX, because that railroad has cut its expenses more aggressively and overhauled its operating model over the past two years.
Norfolk Southern said Wednesday that they are developing a new operating plan to make their railroad more efficient. That's based partly on the strategies CSX is using. Norfolk Southern doesn't plan to share details of its plan until February.
"Our goal is to produce a railroad that delivers a more consistent service product at a lower cost," Squires said.
Edward Jones analyst Dan Sherman said Norfolk Southern delivered a solid quarter, but investors will have to wait to see how aggressive the railroad is about cutting costs and reforming its operations.
Revenue grew 10 percent to $2.95 billion, which also edged out industry forecasts for $2.9 billion.
The railroad was able to increase the prices it charges per carload by 6 percent in the quarter.
Norfolk Southern shares have risen slightly more than 8 percent since the beginning of the year, while the Standard & Poor's 500 index has risen 2.5 percent. The stock has increased 19 percent in the last 12 months.
Elements of this story were generated by Automated Insights (http://automatedinsights.com/ap) using data from Zacks Investment Research. Access a Zacks stock report on NSC at https://www.zacks.com/ap/NSC