NS income up 31%; 2011 capex up 19%

Norfolk Southern Corp. late Tuesday reported fourth-quarter 2010 net income of $402 million, or $1.09 per diluted share, 31% higher than the $307 million, or 82 cents per diluted share, the company garnered in the fourth quarter of 2009. Fourth-quarter 2010 results benefited from a $34 million, or 9 cents per diluted share, change in estimate affecting deferred income taxes, the company said.

Fourth-quarter railway operating revenue was $2.4 billion, up 14% from a year ago.

Net income for 2010 was $1.5 billion, or $4.00 per diluted share, up 45% from the $1.0 billion, or $2.76 per diluted share, for the full-year 2009. Full-year railway operating revenue was up 19% to $9.5 billion.

NS’s fourth-quarter railway operating ratio improved by 1% to 73.2% compared with the same period last year. For 2010, the operating ratio improved by 5% to 71.9% compared with 2009, the company said.

“During 2010 we profitably grew the business, invested in the franchise, generated significant levels of cash, and produced attractive returns for our shareholders,” said CEO Wick Moorman. “We have every reason to believe that 2011 will be an even stronger year for us.”

Norfolk Southern’s proposed 2011 base capital budget is $1.74 billion, 19% higher than 2010’s $1.47 billion. It includes $244 million for facilities and terminals; $212 million for locomotives (including 50 new road units—25 EMD and 25 GE); $155 million for freight cars (including 1,500 new coal cars); $96 million for technology upgrades; $79 million for infrastructure programs (including coal and merchandise network improvements); and $194 million for “other” projetcs.

On top of that, NS plans to spend $334 million to purchase freight cars that are currently leased, and $146 million for PTC.