Railroads Kansas City Southern and Norfolk Southern each reported higher quarterly profit that beat Wall Street estimates, as automotive and intermodal shipments more than offset weakness in coal volume.

A swelling of demand for autos and related parts and materials was one of the biggest profit drivers for the railroads in the first quarter.

Coal volume fell at all major U.S. railroads during the quarter as unusually mild winter weather and decade-low natural gas prices reduced demand from utilities. The railroads expect to make up for some of this year's drop in domestic coal volume by shipping more coal for export.

Norfolk Southern, the third-largest publicly traded U.S. railroad, said a double-digit increase in auto shipment volume overshadowed a double-digit drop in coal traffic. Pricing gains and fuel surcharges drove revenue higher.

"We continue to believe that the United States is on a path of continued, albeit slow, growth, and we feel confident that we can continue to grow our merchandise and intermodal volumes at above the rate of total economic growth," Norfolk Suffolk's chief executive, Wick Moorman, told analysts on a call.

The company said net income increased to $410 million, or $1.23 per share, in the first quarter, from $325 million, or 90 cents a share, a year before. That handily topped the $1.12 per share expected on average by analysts, according to Thomson Reuters I/B/E/S.

Quarterly operating revenue for the Norfolk, Virginia-based company rose 6 percent to $2.8 billion, compared with the $2.75 billion estimated by analysts.

Kansas City Southern reported that net income rose to $75 million, or 68 cents a share, from $64 million, or 58 cents a share, a year earlier. Excluding debt retirement costs, it earned 75 cents, topping the average Wall Street estimate of 72 cents, according to Thomson Reuters I/B/E/S.

Auto segment volume jumped 21 percent, with consumers increasingly buying new cars to replace vehicles they held on to because of the recession.

"I know I've got a new car and had to wait in line to process it because they sold five within an hour," Kansas City Southern's chief executive, David Starling, told analysts. "So I think you're seeing this played out now in the volumes that are going to come out of Mexico, both on the raw materials side, on auto parts, but that's dependent on the auto industry staying strong."

The Kansas City, Missouri-based company, which relies heavily on shipments to and from Mexico through its unit Kansas City Southern de Mexico, recorded a 7 percent increase in carloads and record quarterly revenue.

"Most importantly we are simply not hearing any talk about a softening or decline in business levels from any of our major customers," Pat Ottensmeyer, executive vice president of sales and marketing at Kansas City Southern, told investors on a Tuesday conference call.

The two largest publicly traded U.S. railroads, Union Pacific Corp and CSX Corp, last week also reported higher first-quarter results despite a drop in utility-coal volume.

Lower coal carloads have also partially been offset by increasing "shale-play" volume.

"The common theme of the rails is the pace of growth in their shale region businesses -- oil and gas, inbound and outbound cars," said Kevin Kirkeby, an S&P Capital IQ analyst. This includes shipments of piping and crude oil, as well as sand used in fracking, a process in which sand and chemical-laden water are pumped into wells to widen fractures in oil and gas-bearing rock.

Also, "the near-sourcing phenomenon continues" as an increasing number of auto companies are stepping up production in Mexico, he added.

In other transportation results, trucking and logistics company Ryder System reported a higher profit on the strong performance of Hill Hire, a British-based truck leasing company it bought last June, as well as stronger used-vehicle sales and growth in its commercial rental business.

"We are always interested and active" in terms of mergers and takeovers, Ryder Chief Executiv