Norfolk Southern Corp., struggling with the cost of integrating its purchase of much of Conrail, yesterday reported a 59 percent drop in second-quarter income.
The Norfolk-based railroad said it earned $77 million (20 cents a share) in the period, compared with $187 million (48 cents) in the same quarter of 1998. Revenue rose 11 percent, to $1.19 billion.
For the first six months of the year, Norfolk Southern said profit fell 55 percent, to $189 million (50 cents), compared with $416 million ($1.09) in the first half of last year.
Norfolk Southern chief executive David Goode said the recent quarterly results were hurt by the costs of operating new Conrail routes, as well as a decline in exports of coal because of the global financial crisis.
"Our second-quarter results reflect in large measure both pressures on revenues and higher-than-anticipated expenses related to the many challenges of integrating our portion of the Conrail properties," Goode said.
Norfolk Southern shares rose 6 1/4 cents to close at $30.12 1/2 in trading yesterday on the New York Stock Exchange.
* Allegheny Electric Inc. of Hagerstown boosted its second-quarter earnings with some help from the deregulation of electricity sales.
About half of Allegheny Electric's 1.4 million customers are in Pennsylvania, a state that is one of the pioneers in deregulation, allowing consumers to pick their electric companies. Other states, including Maryland and Virginia, are due to follow in the next few years.
Allegheny Electric earned $64.51 million (55 cents per share) in the second quarter, compared with a loss of $211.56 million in the same period last year, when the company booked a one-time charge related to the restructuring of its Pennsylvania operations. Compared with results before that charge, however, earnings were still up by 20 percent. Revenue increased 2.5 percent, to $643.4 million, as rising non-utility sales more than canceled out a drop in utility sales.
In the first six months of the year, the company earned $162.29 million ($1.35), compared with a loss of $133.32 million in the same period last year. Revenue rose 5 percent, to $1.33 billion, from $1.27 billion.
Allegheny Electric's stock closed yesterday at $33.75, down 31 1/4 cents, in New York Stock Exchange trading.
* Axent Technologies Inc., a Rockville-based security software firm, said it lost $2.2 million in its second quarter ended June 30, compared with a loss of $4 million in the same period the year before. For the first half of the year, Axent lost $8.3 million, compared with $5.9 million in the same period of 1998. This year's figures include charges relating to two acquisitions, while last year's six-month figures include a charge related to another acquisition.
Without these items, Axent would have lost $892,000 in this year's second quarter, compared with net income of $4 million (15 cents a share) for the same period the year before. For the first two quarters of this year, Axent would have lost $3 million, compared with net income of $7.4 million (30 cents) in the same period of last year.
Revenue totaled $26.4 million for the three months ended June 30, compared with $22.5 million it generated in the same quarter of last year. For the first six months of this year, Axent had revenue of $47.9 million, compared with $42.9 million in the same two quarters of 1998.
Axent shares fell 62 1/2 cents to close at $14.25 in trading yesterday on the Nasdaq Stock Market.
* Federal Realty Investment Trust, a Rockville company that owns shopping centers, said rent increases coupled with tight control over expenses meant improved results in the second quarter.
Funds from operations, the most widely followed measure of real estate company results, rose 16 percent, to $24.2 million (60 cents), from $20.94 million (52 cents) in the same quarter last year. Funds from operations is a financial measure that adds back charges for property amortization and depreciation that otherwise reduce net income.
Revenue in the quarter rose 10 percent, to $64.2 million, from $58.4 million. Net income fell 43 percent, to $6.82 million (12 cents), from $11.96 million (25 cents). Net income was down mostly because the company took a one-time charge for losses on the potential sale of assets, mostly one shopping center in Atlanta. That charge is not reflected in funds from operations.
In the first six months of the year, funds from operations rose 14 percent, to $47.88 million ($1.18), from $42.18 million ($1.05) in the same period last year. Revenue rose 12 percent, to $127.78 million from $114.58 million. Net income fell 17 percent, to $20.37 million (41 cents), from $24.66 million.
Federal Realty's stock closed yesterday at $22.25, up 12 1/2 cents in New York Stock Exchange trading.
* Orbital Sciences Corp. of Dulles, a satellite services company, reported a loss for the quarter, citing substantial start-up costs in the company's satellite services businesses.
While Orbital said its consolidated revenue from its various divisions rose 26 percent, to $232 million, from $184 million the same quarter last year, the company reported a loss of $10.1 million, compared with earnings of $6 million (17 cents) for the same period last year.
For the first half of the year, Orbital experienced an after-tax loss of $26 million, compared with earnings of $10.7 million (31 cents) last year.
Orbital shares closed at $23.56 1/4, up $1.43 3/4 yesterday, in trading on the New York Stock Exchange.
* Sunburst Hospitality Corp. reported a modest 2.3 percent increase in revenue for the second quarter but said its profit increased 22.5 percent--even after the company absorbed a big accounting write-off for paying off some debt early.
The Silver Spring-based operator of 87 hotels said revenue increased to $55.7 million, from $54.4 million a year ago, and earnings grew to $2.9 million (15 cents a share), from $2.4 million (12 cents) last year. The accounting charge for early redemption of debt cut quarterly earnings by $336,000 (2 cents) after taxes.
For the first half of the year, Sunburst took in revenue of $106 million, up from $100.5 million the previous year, and its earnings grew to $3.7 million (19 cents) from $3.1 million (15 cents). First-half earnings were cut by $433,000 by the debt write-off and another $599,000 by a change in accounting.
Chief executive Don Landry said the gains came primarily from the company's extended-stay hotels, which are now its main vehicle for growth. With 21 MainStay Suites in operation, Sunburst is building seven more; to finance growth of that business, four older hotels have been sold and nine more are up for sale.
Sunburst shares rose 6 1/4 cents to close at $6.75 in trading yesterday on the New York Stock Exchange.
* USEC Inc., an international energy company based in Bethesda, said its fourth-quarter net income rose to $41 million, compared with $4.3 million in the year-ago period, due to special charges and an improvement in sales to nuclear power stations.
Sales in the quarter ended June 30 climbed 48 percent, to $537.9 million, from $364.5 million in the same period a year ago. USEC's sales typically fluctuate quarter by quarter depending on nuclear power stations' fueling demands.
The company's profit in the quarter included a $34.7 million charge for suspending a research and development project. USEC, once a part of the Department of Energy, also took a $46.6 million charge in the fourth quarter of 1998 to become a private company.
For the entire year, net income rose 4.2 percent, to $152.4 million, from $146.3 million in fiscal 1998. Revenue increased 7.6 percent, to $1.53 billion from $1.42 billion.
USEC shares fell 6 1/4 cents to close at $11.87 1/2 yesterday in New York Stock Exchange trading.
* Washington Gas Light Co., a local utility that distributes natural gas to nearly 850,000 residential, commercial and industrial customers in the Washington metropolitan area, reported a third-quarter loss of $6.8 million, compared with a loss of $7 million for the same period last year.
The District-based company said it normally records a loss in the third quarter because, as a weather-sensitive business, it derives most of its revenue from deliveries to residential heating customers.
For the first nine months of this year, the company said its profit fell to nearly $83 million ($1.79), from $84.8 million ($1.92) for the first nine months of 1998.
Despite the slight dip in profit, Washington Gas said its third-quarter revenue increased to $74.9 million, from $72.5 million for the same period in 1998.
For the first nine months of 1999, the company's revenue was $410.5 million, compared with the $408.2 million it reported for the first nine months of last year.
Washington Gas stock closed yesterday at $28.50, up 75 cents, on the New York Stock Exchange.
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