Shares of Norfolk Southern Corporation (NYSE:NSC) edged slightly lower in premarket trading on Friday after the company reported first-quarter results that beat earnings expectations while revenue came in in line with forecasts.
Earnings Beat, Revenue Flat
The railroad operator posted adjusted earnings per share of $2.65, exceeding analyst estimates of $2.51 by $0.14.
Revenue totalled $3.0 billion, matching expectations and remaining unchanged year-on-year, despite a 1% decline in shipment volumes.
The stock slipped around 0.29% following the announcement.
Margins Under Pressure
The company reported an adjusted operating ratio of 68.7%, an increase of 80 basis points from 67.9% in the first quarter of 2025, indicating some pressure on operating efficiency.
On a GAAP basis, diluted earnings per share were $2.43, while the operating ratio stood at 70.7%. Adjusted figures exclude merger-related costs and the impact of the Eastern Ohio incident.
Operating Performance Declines
Adjusted income from railway operations came in at $939 million, down $22 million, or 2%, compared with the same period last year.
On a GAAP basis, operating income was $877 million, representing a decline of $269 million, or 23%, year-on-year.
Management Commentary
“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. “Despite these challenges, our employees safely delivered a solid service product, managed costs effectively, and earned the continued trust of our customers.”
Outlook Improves Toward Quarter-End
The company highlighted that it maintained operational discipline despite difficult conditions, including fluctuating volumes, harsh winter weather and higher fuel costs.
Management added that performance improved toward the end of the quarter, allowing the company to exit the period with stronger momentum.