Chessie System Inc. reported record first-half earnings yesterday of $59.7 million ($2.97 a share), up from last year's record $47.5 million ($2.39).

Hays T. Watkins, Chessie's chairman and president, attributed the good results to continuing record shipments of coal for export and a dedication to planning and tight cost controls which helped the company to respond quickly to the deteriorating economy.

Second-quarter earnings were $39.4 million ($1.96), up just 3 percent from last year's $38.2 million ($1.92), and reflected "the recession's impact on all of the merchandise markets we serve," Watkins said. Merchandise volume was down 23 percent in the second quarter from the same period last year.

Operating revenues of the Chessie System Railroads totaled $1 billion in the first half of the year, compared with $896 million in the same period last year. Second-quarter revenues totoaled $533 million, up from $496 million a year ago.

The good news for the company is that coal shipments by the Chessie Railroads are breaking records every month. In June, they dumped a record 2.95 million tons of coal at their Baltimore and Newport News facilities, the third month in a row that the record was broken.

So far this year, export dumpings are running 57 percent ahead of last year, Watkins said. To meet burgeoning European demand, he said Chessie will reopen a coal pier at Newport News that will increase its dumping capacity by 2,000 tons an hour and also is considering further expanding its Baltimore facilities.

Despite its good record so far, Watkins said "all we see is uncertainty" for the rest of the year. He estimated a continuation of depressed merchandise carloadings in July and August, with a possible pick-up in the last quarter.

"Although our goal is to improve on last year's record results, and all of our efforts will be directed to doing so, it may be too ambitious in light of our nation's economic problems," Watkins said. "We are determined not to sacrifice the future with the present."