Norfolk Southern on track to achieving 2016 savings goal: CEO
By Nick Carey
CHICAGO (Reuters) - The top executive of Norfolk Southern Corp (NSC.N: Quote) said the railroad was on track to achieve its planned savings target of $200 million this year and that the No. 4 U.S. railroad could further trim capital spending if freight volumes remain weak.
"I think we're well on track and we're confident we can achieve those savings," Chief Executive James Squires told Reuters in a telephone interview on Friday.
Squires spoke to Reuters the day after the Norfolk, Virginia-based railroad posted a better-than-expected first-quarter net profit driven by cost savings.
Norfolk Southern had been under pressure following a hostile takeover bid from Canadian Pacific (CP.TO: Quote) last November to boost profitability and prove to investors it was a viable standalone entity. Canadian Pacific dropped its bid last week.
Investors reacted warmly to the company's first-quarter beat and its stock was up 10.4 percent at $91.20 in midday trading.
"Overall, we applaud the solid execution from management in anticipation of what could have escalated into a more serious conversation with shareholders regarding the overtures from CP," Nomura analyst Matt Troy wrote in a client note.
Squires said Norfolk Southern would have been "open to any and all strategic alternatives that will create value for our shareholders.
"The recent set of proposals (from CP) did not pass muster in terms of value or demonstrate a path through the regulatory process," he added. "Whether there might be another effort in the future, I just wouldn’t want to speculate at this point." Continued...