Norfolk Southern Reports Significant Quarterly Profit Rebound
Norfolk Southern’s quarterly profits have seen a major increase, largely due to insurance payments related to the 2023 derailment in East Palestine, Ohio. The Atlanta-based railroad reported a $750 million profit, or $3.31 per share, in the first quarter of 2025. This represents a significant improvement from the same period last year when the company reported a profit of $53 million, or 23 cents per share.
The previous year’s results were impacted by a $600 million class action settlement related to the derailment. However, Norfolk Southern has been receiving insurance payments that have exceeded its derailment-related expenses since the second quarter of last year, providing a boost to its bottom line. In the first quarter of 2025, insurance payments increased the railroad’s net income by $141 million.
Excluding the insurance windfall, Norfolk Southern would have earned $609 million, or $2.69 per share, compared to $2.49 per share in the first quarter of 2024. This performance beat Wall Street analysts’ average estimate by 3 cents per share. The company’s revenue remained relatively flat at just under $3 billion, but it managed to cut expenses as part of its efficiency efforts.
Norfolk Southern CEO Mark George attributed the company’s success to improved service and efficiency, despite facing winter storm-related costs of approximately $35 million. The railroad delivered about 1% more shipments during the quarter, gaining new business due to its consistent service. This contrasts with its main competitor, CSX railroad, which experienced a 1% decline in volume during the same period.
“Our service performance is increasing our customers’ confidence in Norfolk Southern and allowing us to gain share,” George said in a statement. He predicts that the company will achieve another $150 million in productivity improvements this year, with revenue expected to grow by about 3%. However, he noted that the overall economy and potential impacts of President Donald Trump’s tariffs could affect these projections.
While there are concerns about a possible recession later in the year, Norfolk Southern has not yet seen significant negative trends in its business. The company’s shares rose about 1.6% to $223.47 in midday trading following the report.
As one of the largest railroads in the United States, Norfolk Southern’s performance is closely watched by industry analysts. The company’s ability to navigate challenges such as the East Palestine derailment and economic uncertainties will be crucial to its future success.
