Norfolk Southern slumps aftermarket on weak 1Q forecast

Slowdown hits Norfolk Southern.

Railroad operator Norfolk Southern is forecasting disappointing first-quarter results as demand for coal continued to fall.

Its shares sank $4.91, or 4.7 percent, to $99.96 in aftermarket trading.

The Norfolk, Va.-based company says its net income will be $1 per share and revenue will drop 5 percent from a year ago, to $2.6 billion.

Analysts expected net income of $1.26 per share and $2.66 billion in revenue, according to FactSet.

Norfolk Southern Corp. said coal shipments were down, with a significant decrease in coal exports the biggest factor. The U.S. Energy Information Administration says coal exports have fallen because worldwide growth in demand for the fuel has fallen, prices are down, and output from other coal-exporting countries has increased. The agency says global market for coal probably won’t change much through 2016, and it says U.S. exports will fall in 2015 and stay about the same in 2016.

Norfolk Southern’s revenue from coal shipping fell 6 percent in 2014.

Its revenue is also being hurt by the low price of oil. Because the price of oil has dropped sharply, Norfolk Southern is being paid lower fuel surcharges by its customers. The company said bad weather also hurt its business, but it expects that to improve in the current quarter.

The company reported $11.6 billion in revenue in 2014 and it expects less revenue this year based on the current state of the energy market. Analysts expect $11.49 billion on average.

Norfolk Southern is one of two major rail lines to serve Charleston. It is scheduled to report its first-quarter results the morning of April 29.

Shares of Norfolk Southern fell $1.48 to $104.87 Monday and they are down 4.3 percent in 2015. Over the last 12 months the stock has risen 13 percent.