OMAHA, Neb. (AP) - Norfolk Southern Corp.'s fourth-quarter profit slid 29 percent as the railroad delivered 6 percent less freight and recorded some restructuring charges.
OMAHA, Neb. (AP) — Norfolk Southern Corp.'s fourth-quarter profit slid 29 percent as the railroad delivered 6 percent less freight and recorded some restructuring charges.
The Norfolk, Virginia-based railroad also announced additional cost-cutting to improve the company's performance and help fend off a buyout offer from rival Canadian Pacific.
They include reducing labor and materials costs.
The railroad operator reported net income of $361 million, or $1.20 per share, in the fourth quarter. That's down from $511 million, or $1.64 per share, a year earlier.
The analysts surveyed by Zacks Investment Research expected earnings of $1.28 per share.
Fourth quarter revenue fell 12 percent to $2.52 billion. Analysts expected $2.59 billion.
Norfolk Southern said restructuring costs of $31 million weighed down fourth-quarter profit 10 cents per share.
The additional cuts it plans should save about $130 million in 2016 and create more than $650 million in annual cost savings by 2020, the railroad said.
Norfolk Southern executives have said they believe the railroad and its investors will fare better if it remains independent, so it has rejected Canadian Pacific's roughly $30 billion offers.
Canadian Pacific officials have said they could create a more efficient railroad by combining with Norfolk Southern. They predict roughly $1.8 billion in annual cost savings if the railroads merged with most of the savings coming from Norfolk Southern's operations.
Norfolk Southern officials say they think the cuts Canadian Pacific envisions would go too deep and hurt customer service.
"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," Norfolk Southern CEO Jim Squires said. "We are making progress despite a challenging operating environment."
For the year, Norfolk Southern reported profit of $1.56 billion, or $5.10 per share. That was down from $2 billion, or $6.39 per share, a year ago.
Revenue fell nearly 10 percent to $10.51 billion.
Norfolk Southern shares have dropped 19 percent since the beginning of the year, while the Standard & Poor's 500 index has fallen nearly 7 percent. The stock has declined 35 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 http://www.zacks.com/ap/NSC
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