Southern Railway's profits last year topped $100 million for the first time, president L. Stanley Crane revealed yesterday.
Except for American Telephone & Telegraph's local subsidiary, Chesapeake & Potomac, and the Federal National Mortgage Association, no other private firm based in the District of Columbia has surpassed the $100 million mark in annual earnings.
One year earlier, Southern passed another growth milestone when annual revenues topped $1 billion for the first time. Revenues for 1977 "will substantially exceed" the previous record, Crane said.
The 83-year-old railroad, whose routes cross 13 southeastern states, also is planning record capital expenditures this year of $253 million compared with the previous record of $200 million last year.
Southern has reported record profits for six of the past seven years. The railroad earned $89.2 million ($5.85 a share) in 1976 and nearly had reached that level through the first nine months of 1977 - with profits up 35 per cent to $87.1 million ($5.75 a share).
Wall Street analysts previously forecast that Southern could earn $6.60 a share in 1977, and recent data published by Forbes magazine showed that, of the 14 top rail firms in the nation, Souhtern's net profit margin (earnings divided by sales) was the highest, at 10 per cent.
Crane said yesterday that the growth of profits made possible the large capital outlays, which include $154 million fof new freight equipment and locomotives, $15 million for continued work on a new $43 million yard at Linwood, N. C., $5 million for various and terminal projects, and $9.2 million for a centralized traffic control system.
In an interview Crane said the expects 1978 to be a "good year" but one during which his company's percent age growth in profits may not be as much as it was during 1977.
The first six months look particularly strong, based on expectations that auto sales will hold steady with last year and residential construction will continue at a high level, he added.
Crane said his forecast anticipated that coal industry strike would not be settled before March or April.
For the second six months of 1978, the rail executive said the outlook is "not as firm." He said that, while there is no indication of any early settlement with rail labor unions on new industry contracts (which expired as the year began), talks are continuing and "there is no immediate threat of a strike." If the talks break down, it would be well into the second quarter before a strike would be possible under federal rail labor laws.
Crane said he was at a loss to explain the general pessimism of the investment community, as reflected in a declining stock market. "I personally think...977 was a pretty good year," with inflation under control and growth at a somewhat higher level than expected this year, he added.