Norfolk Southern Corp. said Wednesday it's confident that the nation's economic recovery will run well into next year, after it reported first-quarter earnings up 26 percent from a year ago.
"The veil of uncertainty we felt this time last year has been removed," Chief Financial Officer James A. Squires said in a conference call with analysts.
The railroad's shares rose more than 3 percent in aftermarket trading.
Norfolk Southern, based in Norfolk, Va., earned $325 million, or 90 cents per share, compared with year-ago earnings of $257 million, or 68 cents per share. Revenue rose 17 percent to $2.62 billion.
Analysts expected earnings of 89 cents a share and revenue of $2.47 billion, according to FactSet.
The nation's fourth largest railroad attributed the improved earnings to more demand for everything from coal to retail goods. Higher shipping prices also helped offset a big increase in fuel costs.
Revenue in the railroad's general merchandise unit, a category that includes shipments of a range of products from cars to refrigerators, rose 10 percent to $1.3 billion. Coal revenue climbed 30 percent. Norfolk Southern mostly hauls coal to eastern utilities that use it to generate electricity. It ships a small amount overseas, nearly all of which is used to make steel. Global steel production rose 10 percent in the three-month period.
Revenue from intermodal shipments, which make up about half of Norfolk's total carloads, rose 18 percent. Those shipments move by more than one mode of transportation _ trains, trucks and ships. The category is a good indicator of consumer spending, since most of the shipments are retail goods. During the quarter, Norfolk started shipping packages for FedEx Corp. FedEx and UPS move some of their packages on trains to save money.
Norfolk Southern's expenses rose 20 percent. The railroad added more employees during the quarter, but was also hit by higher fuel costs. Norfolk paid 53 percent more for fuel in the first three months of the year than in the same period of 2010.
For the rest of the year, Norfolk Southern expects growth in all of its segments except forest products, which continues to languish in the weak housing and paper markets. CEO Wick Moorman called the outlook for that unit "moderate at best." New home sales rose 11 percent in March from the month before, but they're still below the level that economists view as healthy.
Norfolk Southern shares rose $2.09, or 3.1 percent, to $70.50 in after-hours trading. Shares lost a penny in the regular session to close at $68.41. The stock's 52-week high is $70.
Last week, Norfolk rival CSX Corp. reported first-quarter earnings rose 30 percent with revenue up 13 percent.