First look: Norfolk Southern earnings

Norfolk Southern reported higher third-quarter earnings and record revenue Thursday as freight volume grew and fuel surcharges increased, although expenses consumed a larger share of revenue.

The railroad (NYSE: NSC) said revenue rose 14%, to $3.5 billion, on a 3% increase in volume. Higher fuel surcharges accounted for eight percentage points of revenue growth. Income from railway operations increased 5%, to approximately $1.2 billion, while diluted earnings per share rose 7%, to $3.37.

Adjusted earnings per share increased 10%, to $3.62, excluding merger-related expenses and effects of the East Palestine derailment, along with restructuring and other charges in the year-earlier comparison. Adjusted operating income rose 7%, to approximately $1.2 billion.

Despite the earnings growth, Norfolk Southern’s operating ratio, a key indicator of efficiency, worsened 2.8 percentage points, to 67.4%. Its adjusted operating ratio increased 2.1 points, to 65.4%, underscoring pressure on margins even as revenue reached a quarterly record.

This story was originally published by FreightWaves. Read the full story at FreightWaves →