Norfolk Southern profits rise on higher volume and revenue

Norfolk Southern reported a rise in profits for the third quarter, driven by increased volume and revenue. The company's chief executive, Mark George, highlighted the steady execution and notable improvements in the network while delivering solid results. Operating income grew by 5% to $1.15 billion, while revenue increased by 14% to $3.52 billion, with fuel surcharge revenue accounting for 8 of the 14 points of revenue growth.

Earnings per share rose 7% to $3.37. The operating ratio, up 2.8 points from the previous year, was 67.4%, largely due to higher fuel costs. Adjusted for costs related to a derailment and merger, the operating ratio was 65.4%. Overall volume increased by 3%, with growth in merchandise, intermodal, and coal volume. George expressed optimism for the rest of 2026, noting that high fuel prices are boosting energy-related traffic.

However, the company is watching the potential impact of prolonged high gas prices on consumer demand. NS has introduced new online tools to improve customer service and provide better shipment visibility. The company's key operational metrics improved compared to the second quarter, despite weather-related disruptions and congestion.