Norfolk Southern profits rise on higher volume and revenue

Norfolk Southern’s third-quarter profits rose as higher volume and rates, and fuel surcharges, produced record revenue.

“Our third quarter was strong with steady execution, making notable improvements to our network while delivering solid results,” Chief Executive Mark George said on the railroad’s earnings call. “We have an outstanding team of thoroughbreds who remain focused on the fundamentals: operating a safe, reliable railroad, serving our customers, growing the business, and improving productivity across the network.”

Operating income increased 5% to $1.15 billion, as revenue grew 14% to $3.52 billion. Fuel surcharge revenue was responsible for 8 of the 14 points of revenue growth. Earnings per share rose 7%, to $3.37.

The railroad’s (NYSE: NSC) operating ratio was 67.4%, up 2.8 points from a year ago largely due to higher fuel costs. Adjusted for the impact of ongoing costs related to the February 2023 derailment and hazardous materials release in East Palestine, Ohio, and expenses related to the proposed merger with Union Pacific (NYSE: UNP), the operating ratio was 65.4%.

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