Norfolk Southern (NYSE: NSC) Q1 2026 profit hit by merger and Ohio incident costs
Rhea-AI Filing Summary
Norfolk Southern Corporation reported first quarter 2026 results showing stable revenue but lower profitability driven by merger costs and the Eastern Ohio incident. Railway operating revenues were $3.0 billion, essentially flat year-over-year on a 1% volume decline. Income from railway operations declined to $877 million, down 23%, and the operating ratio worsened to 70.7% from 61.7%. Diluted earnings per share were $2.43, a 27% decrease.
Excluding merger-related expenses and the Eastern Ohio incident in both periods, adjusted income from railway operations was $939 million, down 2%, with an adjusted operating ratio of 68.7%. Adjusted diluted EPS was $2.65, just 1% below the prior year’s adjusted level. Net income was $547 million. Operating cash flow fell to $344 million from $950 million, while the company ended March 31, 2026 with $1.34 billion in cash and cash equivalents.
Positive
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Insights
Q1 2026 earnings pressured by one-time items, core results roughly stable.
Norfolk Southern generated railway operating revenues of $3.0 billion, essentially flat on a 1% volume decline, highlighting pricing and mix resilience in a soft freight environment. GAAP income from railway operations fell to $877 million, down 23%, as merger-related expenses and Eastern Ohio incident costs weighed on results.
These items also pushed the operating ratio to 70.7% versus 61.7% a year earlier, and diluted EPS to $2.43, down 27%. On an adjusted basis, excluding merger-related expenses and Eastern Ohio incident effects in both years, income from railway operations was $939 million, only 2% below adjusted first quarter 2025, and adjusted EPS of $2.65 was down just 1%.
Cash generation was notably weaker, with net cash provided by operating activities of $344 million versus $950 million in the first three months of 2025, reflecting working capital movements and lower earnings. Management emphasized disciplined execution on safety, service, and cost control through severe winter weather, volatile volumes, higher fuel prices, and continuing effects from the Eastern Ohio incident and pending merger.
8-K Event Classification
Key Figures
Key Terms
operating ratio financial
non-GAAP financial measures financial
Eastern Ohio incident financial
forward-looking statements regulatory
Earnings Snapshot
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
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Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
Securities registered pursuant to Section 12(b) of the Act:
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Trading |
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02 Results of Operations and Financial Condition.
Item 7.01 Regulation FD Disclosure.
On April 24, 2026, Norfolk Southern Corporation (the “Company”) issued a press release reporting first-quarter results for 2026, as well as its Quarterly Financial Data for the first quarter of 2026. A copy of the press release is attached as Exhibit 99.1 and a copy of the Quarterly Financial Data is attached as Exhibit 99.2, each of which is incorporated by reference herein. These documents are also available on the Company’s website, www.norfolksouthern.com.* This unaudited financial information and summary of certain notes to the consolidated financial statements should be read in conjunction with: (a) the consolidated financial statements and notes included in the Company's latest Annual Report on Form 10-K and in subsequent Quarterly Reports on Form 10-Q; and (b) any Current Reports on Form 8-K.
The information contained in this Current Report shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.
Item 9.01 Financial Statements and Exhibits.
The following exhibits are furnished as part of this Current Report on Form 8-K:
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Exhibit Number |
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Description |
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99.1 |
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Press Release dated April 24, 2026 |
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99.2 |
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2026 Q1 Financial Data |
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104 |
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Cover Page Interactive Data File (embedded within the Inline XBRL document) |
* Internet addresses are provided for informational purposes only and are not intended to be hyperlinks.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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NORFOLK SOUTHERN CORPORATION |
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By: |
/s/ Jeremy Ballard |
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Name: Jeremy Ballard |
Exhibit 99.1
FOR IMMEDIATE RELEASE
Norfolk Southern reports first quarter 2026 results
Results reflect disciplined execution on safety, service, and cost control through a dynamic first quarter
ATLANTA, April 24, 2026 – Norfolk Southern Corporation (NYSE: NSC) announced Friday its first quarter 2026 financial results. In the quarter, revenue was $3.0 billion, income from railway operations was $877 million, operating ratio was 70.7%, and diluted earnings per share were $2.43.
Adjusting the results to exclude merger-related expenses and the effects of the Eastern Ohio incident, first quarter income from railway operations was $939 million, the operating ratio was 68.7%, and diluted earnings per share were $2.65.
“In the first quarter, our team stayed focused on what we could control, operating with discipline amid volatile volumes, severe winter weather, and a rapidly shifting macroeconomic environment including the dramatic rise in fuel prices in March,” said Mark George, president and chief executive officer of Norfolk Southern. “Despite these challenges, our employees safely delivered a solid service product, managed costs effectively, and earned the continued trust of our customers. As conditions improved, we captured momentum exiting the quarter, reinforcing the strength of our operating foundation and the dedication of the entire Norfolk Southern team.”
First Quarter Summary
Norfolk Southern Corporation | 1
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About Norfolk Southern
Since 1827, Norfolk Southern Corporation (NYSE: NSC) and its predecessor companies have safely moved the goods and materials that drive the U.S. economy. Today, it operates a 22-state freight transportation network. Committed to furthering sustainability, Norfolk Southern helps its customers avoid approximately 15 million tons of yearly carbon emissions by shipping via rail. Its dedicated team members deliver approximately 7 million carloads annually, from agriculture to consumer goods. Norfolk Southern also has the most extensive intermodal network in the eastern U.S. It serves a majority of the country's population and manufacturing base, with connections to every major container port on the Atlantic coast as well as major ports across the Gulf Coast and Great Lakes. Learn more by visiting www.NorfolkSouthern.com.
Media Inquiries:
Media Relations
Investor Inquiries:
Investor Relations
Cautionary Statement on Forward-Looking Statements
Certain statements in this press release are "forward-looking statements" within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995, as amended. These statements relate to future events or our future financial performance and involve known and unknown risks, uncertainties, and other factors that may cause our actual results, levels of activity, performance, or our achievements or those of our industry to be materially different from those expressed or implied by any forward-looking statements. In some cases, forward-looking statements may be identified by the use of words like "may," "will," "could," "would," "should," "expect," "anticipate," "believe," "project," or other comparable terminology. While the Company has based these forward-looking statements on those expectations, assumptions, estimates, beliefs, and projections it views as reasonable, such forward-looking statements are only predictions and involve known and unknown risks and uncertainties, many of which involve factors or circumstances that are beyond the Company's control, including but not limited to: (i) changes in domestic or international economic, political or business conditions, including those impacting the transportation industry; (ii) the Company’s ability to successfully implement its operational, productivity, and strategic initiatives; (iii) a significant adverse event on our network, including but not limited to a mainline accident, discharge of hazardous material, or climate-related or other network outage; (iv) the outcome of claims, litigation, governmental proceedings, and investigations involving the Company, including those with respect to the Eastern Ohio incident; (v) new or additional governmental regulation and/or operational changes resulting from or related to the Eastern Ohio incident; (vi) a significant cybersecurity incident or other disruption to our technology infrastructure; and (vii) those pertaining to the Merger. These and other important factors, including those discussed under "Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2025, filed with the SEC on February
Norfolk Southern Corporation | 2
9, 2026, may cause actual results, performance, or achievements to differ materially from those expressed or implied by these forward-looking statements. The forward-looking statements herein are made only as of the date they were first issued, and unless otherwise required by applicable securities laws, the Company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.
Non-GAAP Financial Measures
Information included within this press release contains non-GAAP financial measures, including adjusted income from railway operations, adjusted operating ratio, and adjusted diluted earnings per share. Non-GAAP financial measures should be considered in addition to, not as a substitute for, the financial measures reported in accordance with U.S. generally accepted accounting principles (GAAP).
Our first quarter 2026 non-GAAP financial results exclude merger-related expenses and both the first quarters of 2026 and 2025 exclude the overall impact on operating expenses resulting from the Eastern Ohio Incident (the Incident). The following tables adjust our first quarter 2026 and first quarter 2025 GAAP financial results to exclude the effects of those items. The income tax effects of the non-GAAP adjustments were calculated based on the applicable tax rates to which the non-GAAP adjustments related. We use these non-GAAP financial measures internally and believe this information provides useful supplemental information to investors to facilitate making period-to-period comparisons by excluding these costs. While we believe that these non-GAAP financial measures are useful in evaluating our business, this information should be considered as supplemental in nature and is not meant to be considered in isolation from, or as a substitute for, the related financial information prepared in accordance with GAAP. In addition, these non-GAAP financial measures may not be the same as similar measures presented by other companies. Information about the adjustments that are not currently available to us could have a potentially unpredictable and significant impact on future GAAP results. Further information about the Company’s non-GAAP measures are available on our website at www.norfolksouthern.com on the Investors page under Events and Presentations.
Norfolk Southern Corporation | 3
($ in millions, except per share amounts) |
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First |
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Income from railway operations |
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$ |
877 |
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Merger-related expenses and effect of the Incident |
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62 |
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Adjusted income from railway operations |
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$ |
939 |
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Operating ratio |
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70.7 |
% |
Merger-related expenses and effect of the Incident |
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(2.0 |
%) |
Adjusted operating ratio |
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68.7 |
% |
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Diluted earnings per share |
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$ |
2.43 |
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Merger-related expenses and effect of the Incident |
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0.22 |
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Adjusted diluted earnings per share |
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$ |
2.65 |
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($ in millions, except per share amounts) |
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First |
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Income from railway operations |
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$ |
1,146 |
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Effect of the Incident |
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(185 |
) |
Adjusted income from railway operations |
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$ |
961 |
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Operating ratio |
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61.7 |
% |
Effect of the Incident |
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6.2 |
% |
Adjusted operating ratio |
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67.9 |
% |
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Diluted earnings per share |
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$ |
3.31 |
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Effect of the Incident |
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(0.62 |
) |
Adjusted diluted earnings per share |
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$ |
2.69 |
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Norfolk Southern Corporation | 4
Exhibit 99.2
Norfolk Southern Corporation and Subsidiaries
Consolidated Statements of Income
(Unaudited)
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First Quarter |
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2026 |
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2025 |
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(in millions, except per share amounts) |
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Railway operating revenues |
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Merchandise |
$ |
1,885 |
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$ |
1,863 |
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Intermodal |
749 |
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760 |
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Coal |
364 |
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370 |
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Total railway operating revenues |
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2,998 |
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2,993 |
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Railway operating expenses |
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Compensation and benefits |
740 |
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739 |
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Purchased services and rents |
522 |
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498 |
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Fuel |
256 |
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244 |
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Depreciation |
352 |
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346 |
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Materials and other |
189 |
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205 |
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Merger-related expenses |
52 |
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— |
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Eastern Ohio incident |
10 |
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(185 |
) |
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Total railway operating expenses |
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2,121 |
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1,847 |
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Income from railway operations |
877 |
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1,146 |
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Other income – net |
35 |
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31 |
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Interest expense on debt |
197 |
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199 |
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Income before income taxes |
715 |
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978 |
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Income taxes |
168 |
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228 |
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Net income |
$ |
547 |
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$ |
750 |
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Earnings per share – diluted |
$ |
2.43 |
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$ |
3.31 |
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Weighted average shares outstanding – diluted |
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225.0 |
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226.5 |
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See accompanying notes to consolidated financial statements.
Norfolk Southern Corporation and Subsidiaries
Consolidated Balance Sheets
(Unaudited)
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March 31, |
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December 31, |
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2026 |
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2025 |
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($ in millions) |
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Assets |
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Current assets: |
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Cash and cash equivalents |
$ |
1,341 |
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$ |
1,530 |
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Accounts receivable – net |
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1,123 |
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988 |
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Materials and supplies |
312 |
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271 |
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Other current assets |
248 |
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409 |
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Total current assets |
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3,024 |
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3,198 |
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Investments |
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4,116 |
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4,089 |
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Properties less accumulated depreciation of $14,769 and $14,617, respectively |
36,442 |
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36,479 |
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Other assets |
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1,531 |
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1,470 |
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Total assets |
$ |
45,113 |
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$ |
45,236 |
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Liabilities and stockholders’ equity |
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Current liabilities: |
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Accounts payable |
$ |
1,695 |
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$ |
1,863 |
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Income and other taxes |
320 |
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340 |
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Other current liabilities |
711 |
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965 |
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Current maturities of long-term debt |
609 |
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607 |
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Total current liabilities |
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3,335 |
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3,775 |
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Long-term debt |
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16,492 |
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16,480 |
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Other liabilities |
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1,724 |
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1,723 |
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Deferred income taxes |
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7,758 |
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7,711 |
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Total liabilities |
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29,309 |
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29,689 |
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Stockholders’ equity: |
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Common stock $1.00 per share par value, 1,350,000,000 shares authorized; |
226 |
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226 |
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Additional paid-in capital |
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2,312 |
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2,296 |
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Accumulated other comprehensive loss |
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(211 |
) |
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(210 |
) |
Retained income |
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13,477 |
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13,235 |
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Total stockholders’ equity |
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15,804 |
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15,547 |
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Total liabilities and stockholders’ equity |
$ |
45,113 |
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$ |
45,236 |
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See accompanying notes to consolidated financial statements.
Norfolk Southern Corporation and Subsidiaries
Consolidated Statements of Cash Flows
(Unaudited)
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First Three Months |
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2026 |
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2025 |
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($ in millions) |
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Cash flows from operating activities |
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Net income |
$ |
547 |
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$ |
750 |
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Reconciliation of net income to net cash provided by operating activities: |
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|
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Depreciation |
352 |
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346 |
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Deferred income taxes |
48 |
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57 |
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Gains and losses on properties |
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(17 |
) |
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(23 |
) |
Changes in assets and liabilities affecting operations: |
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Accounts receivable |
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(135 |
) |
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(165 |
) |
Materials and supplies |
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(41 |
) |
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4 |
|
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Other current assets |
45 |
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31 |
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Current liabilities other than debt |
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(388 |
) |
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22 |
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Other – net |
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(67 |
) |
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(72 |
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Net cash provided by operating activities |
344 |
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|
950 |
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Cash flows from investing activities |
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Property additions |
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(382 |
) |
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(449 |
) |
Property sales and other transactions |
162 |
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18 |
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Investment purchases |
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(3 |
) |
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(609 |
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Investment sales and other transactions |
10 |
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19 |
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Net cash used in investing activities |
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(213 |
) |
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(1,021 |
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Cash flows from financing activities |
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Dividends |
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(303 |
) |
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(306 |
) |
Common stock transactions |
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(11 |
) |
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(9 |
) |
Purchase and retirement of common stock |
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(5 |
) |
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(248 |
) |
Debt repayments |
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(1 |
) |
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(1 |
) |
Net cash used in financing activities |
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(320 |
) |
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(564 |
) |
Net decrease in cash and cash equivalents |
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(189 |
) |
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|
(635 |
) |
Cash and cash equivalents |
|
|
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At beginning of year |
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1,530 |
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|
1,641 |
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At end of period |
$ |
1,341 |
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$ |
1,006 |
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Supplemental disclosures of cash flow information |
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Cash paid during the period for: |
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Interest (net of amounts capitalized) |
$ |
185 |
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$ |
192 |
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Income taxes (net of refunds) |
138 |
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|
1 |
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See accompanying notes to consolidated financial statements.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. Merger-Related Expenses
During the first quarter of 2026, we incurred $52 million in merger-related expenses primarily related to costs associated with employee retention agreements, third-party advisor fees, and legal fees.
2. Eastern Ohio Incident
On February 3, 2023, a train operated by us derailed in East Palestine, Ohio (the Incident). During the first quarter of 2026, we incurred net expenses of $10 million, as compared to $185 million of net recoveries for the same period last year. The total amounts recognized include the impact of $1 million and $224 million in recoveries during the first quarter of 2026 and 2025, respectively.
3. Stock Repurchase Program
We did not repurchase any shares of common stock in the first three months of 2026, while we repurchased and retired 1.0 million shares of common stock under our stock repurchase program during the same period last year at a cost of $250 million, inclusive of accrued excise taxes. “Purchase and retirement of common stock” in 2026 as presented on the Consolidated Statements of Cash Flows reflects the payment of excise taxes on shares repurchased in 2025.