In This Article:
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EPS Growth: 8% growth on an adjusted basis.
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Storm Restoration Costs: $35 million incurred due to weather impacts.
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Labor Productivity Savings: $55 million in savings.
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Volume Increase: Overall volume rose 1% year-over-year.
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Total Revenue: Flat, with total revenue less fuel up 2%.
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Merchandise RPU Less Fuel: Increased by 4% year-over-year.
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Intermodal Volume Increase: 3% year-over-year increase.
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Coal RPU Less Fuel: Decreased by 3% due to lower export coal prices.
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Operating Ratio: Adjusted operating ratio was 67.9%, including 120 basis points from storm costs.
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Net Income and EPS Improvement: 8% improvement year-over-year.
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Share Repurchases: Nearly $250 million of shares bought back in the quarter.
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Insurance Recoveries: Net benefit of $185 million from insurance recoveries related to the Eastern Ohio incident.
Release Date: April 23, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Norfolk Southern Corp (NYSE:NSC) achieved an 8% EPS growth on an adjusted basis despite severe weather disruptions.
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The company demonstrated strong network resiliency, quickly restoring operations after 18 significant storms.
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Labor productivity improvements resulted in $55 million in savings, contributing to financial performance.
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The company achieved a 3% year-over-year volume increase in Intermodal, with gains in both domestic and international segments.
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Norfolk Southern Corp (NYSE:NSC) maintained a strong focus on safety, achieving a 13% year-over-year reduction in FRA injury ratio and a 43% reduction in train accident frequency.
Negative Points
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Norfolk Southern Corp (NYSE:NSC) faced $35 million in extraordinary expenses due to storm restoration, impacting the operating ratio.
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Export coal prices were lower, negatively affecting revenue per unit (RPU) less fuel by 3%.
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The company experienced flat total revenue, with fuel surcharge headwinds masking otherwise solid revenue performance.
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There is uncertainty regarding the impact of tariffs on end markets and revenues, which could affect future performance.
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The company is facing challenges in the Metals and Construction segments, with volume declines offsetting gains in other areas.
Q & A Highlights
Q: Can you discuss the operating ratio and the impact of winter storm costs on your targets? A: Jason Zampi, CFO, explained that despite the harsh winter weather and fuel price headwinds, Norfolk Southern is focused on achieving its full-year guidance of $150 million in productivity and cost savings, along with a 150 basis point margin improvement on 3% revenue growth. The operating ratio for the remainder of the year needs to be under 64% to meet targets, but it won't be evenly spread across quarters.