Despite recent strong readings in rail traffic, Norfolk Southern, the USA’s 4th largest rail company, is announcing weak volumes in certain markets, rising fuel costs and a guidance cut. On the back of the FedEx announcement, this is another disconcerting sign for economic growth (via Yahoo):
“NORFOLK, Va., Sept. 19, 2012 /PRNewswire/ — Norfolk Southern Corporation (NSC) announced that third quarter 2012 earnings are expected to be in the range of $1.18 to $1.25 per diluted share, primarily due to volume declines in certain markets and lower revenues from fuel surcharges.
Decreased coal and merchandise shipments, offset in part by growth in intermodal volumes, are together expected to reduce revenues by approximately $120 million compared with third quarter 2011.
Fuel surcharge revenues are anticipated to be approximately $80 million below the same period last year. Third quarter 2011 fuel surcharge revenues included a favorable lag-effect of $52 million, whereas results for the current quarter are expected to be impacted by an unfavorable lag-effect in the range of $25 to $30 million.”