Norfolk Southern Reports $1.6 billion in Income From Railway Operations During Third Quarter

Norfolk Southern Corporation’s third quarter income from railway operations was $1.6 billion, while its operating ratio was 47.7%, and its diluted earnings per share were $4.85.

After adjusting the results to exclude the impact of railway line sales, the aftermath of the February 2023 East Palestine wreck, restructuring and other charges, railway operating income was $1.1 billion, the operating ratio was 63.4%, and diluted earnings per share were $3.25.

During the quarter, the company closed two railway line sales resulting in cash proceeds of nearly $400 million and gains of $380 million. For the second consecutive quarter, insurance recoveries related to the Eastern Ohio incident exceeded incremental costs.

“The Norfolk Southern team continues to build momentum, producing strong results for our shareholders and customers, and delivering on our safety culture for our employees” Norfolk Southern President and CEO Mark R. George said in a Tuesday morning announcement. “Working together, our team drove productivity and grew volumes while demonstrating resiliency in dealing with weather challenges. Thanks to our team’s hard work, we delivered sequential and year-over-year margin improvement putting us on track to achieve our adjusted operating ratio targets for the second half and full year 2024, and we are well positioned for long-term value creation.”

Third Quarter Summary

• Railway operating revenues of $3.1 billion, up $80 million, or 3%, compared to the third quarter 2023.
• Income from railway operations was $1.6 billion, an increase of $840 million, or 111%, compared to the third quarter 2023.
• Adjusting for the impact of railway line sales, restructuring and other charges, and the Eastern Ohio incident, income from railway operations was $1.1 billion, up $198 million, or 22%, compared to adjusted third quarter 2023.
• Operating ratio in the quarter was 47.7% compared to 74.6% in third quarter 2023.
• On an adjusted basis, the operating ratio for third quarter 2024 was 63.4%. This represents 570 basis points of improvement from adjusted third quarter 2023 which was 69.1%.
• Diluted earnings per share were $4.85, an increase of 131% compared to third quarter 2023.
• Adjusted diluted earnings per share were $3.25, up $0.60, or 23%, compared to adjusted third quarter 2023.