Norfolk Southern Corporation reported its fourth‑quarter and full‑year 2025 results on January 29, 2026. Revenue for the quarter was $2.97 billion, a 2% decline from the $3.02 billion reported in Q4 2024. Full‑year revenue totaled $12.18 billion, essentially flat with the $12.20 billion of 2024 and down less than 1% year‑over‑year. The company’s revenue mix shifted: merchandise revenue rose 2% on a 1% volume increase, intermodal revenue fell 6% on a 7% volume drop, and coal revenue declined 11% despite a 1% volume increase, reflecting weaker seaborne pricing.
The company’s earnings per share exceeded expectations. Adjusted EPS for Q4 2025 was $3.22, beating the consensus estimate of $2.78 by $0.44 or 15.8%. GAAP EPS was $2.87, also above the $2.77 estimate. The beat was driven by disciplined cost management, productivity gains that lifted operating margins, and a favorable operating‑ratio improvement to 65.3% from 68.5% in the prior quarter. The company’s operating ratio for the full year was 64.2%, down from 66.4% in 2024, reflecting a 2.2‑percentage‑point improvement in efficiency.
Operating income and margins improved despite the revenue decline. Adjusted operating income rose to $1.93 billion from $1.84 billion in Q4 2024, while the adjusted operating ratio fell to 65.3% from 68.5%. The improvement was largely attributable to the 7% productivity gain, which moved more gross ton‑miles with fewer employees, and to lower freight‑rate pressure in the merchandise segment. The company also reported over $215 million in annual productivity savings, surpassing its target and reinforcing its cost‑control narrative.
Looking ahead, Norfolk Southern guided 2026 operating expenses to $8.20‑$8.40 billion, a slight increase from the $8.10‑$8.30 billion range previously disclosed, and capped capital spending at $1.90 billion. Management emphasized that the guidance reflects a cautious outlook amid a volatile macro‑economic backdrop, but also confidence in maintaining profitability through continued productivity initiatives and cost discipline. The company reiterated its focus on safety, with record‑low injury and accident rates, and on customer service reliability as it navigates the competitive environment following the pending merger with Union Pacific.
Management highlighted the company’s resilience: CEO Mark George said the quarter “strengthened the foundation of our railroad” through disciplined cost commitments and measurable safety gains. He noted that inflationary pressures in wages, materials, and depreciation continued to weigh on operating expenses, but that the company’s productivity gains and strategic investments position it to weather the uncertain demand environment. The company’s performance was well received by the market, reflecting confidence in its operational execution and strategic trajectory.
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