“This quarter, Norfolk Southern (NS) delivered another set of strong results—growing volumes, managing costs, and delivering 8% EPS growth,” said President and CEO Mark George during a second-quarter 2025 financial report, which closely followed the announcement that Union Pacific will be acquiring NS.
For second-quarter 2025, NS reported that revenue was $3.1 billion, income from railway operations was $1.2 billion, operating ratio was 62.2%, and diluted earnings per share were $3.41. Recoveries related to the East Palestine, Ohio, derailment in 2023, “exceeded incremental costs in the quarter,” the Class I said.
After adjusting the results to exclude restructuring and other charges, as well as the effects of the Eastern Ohio incident, second quarter income from railway operations was $1.1 billion, the operating ratio was 63.4%, and diluted earnings per share were $3.29.
For first-quarter 2025, NS posted:
- Railway operating revenues of $3.1 billion, an increase of $66 million compared to second-quarter 2024, on volume growth of 3%.
- Excluding the impact of fuel surcharge revenue, which was lower compared to the prior year, railway operating revenues were $2.9 billion, up $122 million, or 4% compared to adjusted second-quarter 2024.
- Income from railway operations was $1.2 billion, an increase of $44 million, compared to second-quarter 2024.
- Adjusting for restructuring and other costs and effects of the Eastern Ohio incident, income from railway operations was $1.1 billion, up $75 million, or 7% compared to adjusted second-quarter 2024.
- Operating ratio in the quarter was 62.2% compared to 62.8% in second-quarter 2024.
- Adjusting for restructuring and other costs and effects of the Eastern Ohio incident, the operating ratio for the quarter was 63.4%. This represents 170 basis points of improvement from adjusted second-quarter 2024, which was 65.1%.
- Diluted earnings per share were $3.41, up from $3.25 in second-quarter 2024.
- Adjusting for restructuring and other costs and the effects of the Eastern Ohio incident, diluted earnings per share were $3.29, up $0.23, or 8%, compared to adjusted second-quarter 2024.
2025 Outlook and Guidance
- Continue to expect revenue growth in 2025, but given dynamic economic environment, updating full year revenue growth expectation to 2-3% vs. 2024.
- Adjusted operating ratio improvement for 2025 now expected to be 100-150 bps better than 2024; however, third-quarter 2025 is expected to be pressured “due to a weaker than expected revenue environment early in the quarter.”
- Raising expected productivity savings in 2025 to $175+ million as cost-control and targeted initiatives are yielding strong results.
“While we remain clear-eyed about market uncertainty, our performance reflects the strength of our strategy and our ability to continue disciplined execution, relentless focus on safety and seamless customer service,” added George. “We’re controlling what we can control and, in fact, are ahead of schedule on our productivity targets thanks to the exceptional efforts of our Thoroughbred team.”
During the merger announcement, George said: “Norfolk Southern, like Union Pacific, is a railroad integral to the U.S. economy, with a storied 200-year legacy of serving customers across 22 states in the eastern half of the nation,” said George. “Our safety, network, and financial performance is among the best we’ve had as a company, as is our customer satisfaction. And it is from this position of strength that we embark on this transformational combination. We are confident that the power of Norfolk Southern’s franchise, diversified solutions, high-quality customers and partners, as well as skilled employees, will contribute meaningfully to [the U.S.’s] first transcontinental railroad, and to igniting rail’s ability to deliver for the whole [United States] economy today and into the future. Union Pacific is a true partner that shares our belief in rail’s ability to deliver for all stakeholders simultaneously, and we are excited for our future together.”
