Fuel costs and tight truck capacity have driven more shipments to the rails from the highways, and Norfolk Southern sees its growth this year surpassing the broader U.S. economy.
More fuel-efficient intermodal shipping is a major beneficiary and has been driving up rail traffic.
Intermodal refers to the movement of goods in containers that can be shifted from one form of transportation to another, such as from train to ship.
General merchandise revenue rose 12 percent from a year ago to $1.4 billion in the quarter, coal revenue increased 28 percent to $893 million and intermodal revenue rose 20 percent to $540 million.
Three other top U.S. publicly held railroad companies -- Union Pacific, CSX Corp and Kansas City Southern -- also reported higher quarterly profits recently.
Norfolk Southern's shares rose nearly 1.5 percent in after-hours trading to $76.59, which is up more than 22 percent so far this year.
The company earlier raised its quarterly common stock dividend by 7.5 percent to 43 cents per share.
The Norfolk, Virginia-based company said second-quarter net income jumped to $557 million, or $1.56 per share, which was 42 percent above the $392 million, or $1.04 a share, of a year ago.
Operating revenue for the third-largest publicly held U.S. railroad rose 18 percent to $2.87 billion from $2.43 billion a year ago.
Adjusted to reflect a nonrecurring tax-related benefit, earnings per share amounted to $1.38, compared with the consensus analyst estimate of $1.29 per share on revenue of $2.75 billion, according to Thomson Reuters I/B/E/S.
The company said it set record highs for earnings per share and income, and second-quarter peaks for revenue and operating income.
"We're seeing opportunities in the global economy and we're moving forward with initiatives to drive business growth, productivity and efficiency across our company," Chief Executive Wick Moorman said in a statement. (Reuters)
