Norfolk Southern reports second quarter 2025 results

Norfolk Southern Corporation announced its second quarter 2025 financial results. For the quarter, 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 Eastern Ohio incident exceeded incremental costs in the quarter.

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.

"This quarter, Norfolk Southern delivered another set of strong results — growing volumes, managing costs, and delivering 8% EPS growth. 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," said President and CEO Mark 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."

Second quarter summary

• Railway operating revenues of $3.1 billion, an increase of $66 million compared to the 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 of 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 the 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 the 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

Union Pacific transaction

Norfolk Southern and Union Pacific announced an agreement to combine in a stock and cash transaction to create America's first transcontinental railroad. Under the terms of the agreement, Norfolk Southern shareholders will receive 1.0 Union Pacific common share and $88.82 in cash for each share of Norfolk Southern common stock. The implied value of $320 per share represents an implied total enterprise value for Norfolk Southern of $85 billion based on Union Pacific's closing stock price on July 16, 2025.