Norfolk Southern Corp , the No. 4 U.S. railroad, said on Tuesday that its earnings in the latest quarter fell nearly 42 percent as the economic downturn continued to weigh on freight volumes.

The company reported third-quarter net income fell to $303 million, or 81 cents a share, from $520 million, or $1.37 a share a year earlier.

The Norfolk, Virginia based company said railway operating revenue fell 29 percent to $2.1 billion, pulled down by a 35 percent drop in coal revenue and a 31 percent drop in intermodal revenue.

Analysts, on average, expected Norfolk Southern to report a profit of 79 cents a share, according to Thomson Reuters I/B/E/S.

(Reporting by James B. Kelleher; editing by Carol Bishopric)