Norfolk Southern’s Latest Earnings: What Investors Need to Know

First look: Norfolk Southern reports record revenue as freight volume grows

Norfolk Southern reported record third-quarter revenue and higher earnings Thursday, supported by increased freight volume, stronger fuel surcharges and productivity improvements across its network. The railroad also said demand for rail service benefited from a tighter trucking market during the quarter.

For the three months ended Sept. 30, Norfolk Southern recorded $3.5 billion in railway operating revenue, a quarterly record and a 14% increase from the third quarter of 2025. Revenue increased by $423 million, while freight volume rose 3% year over year. Higher fuel surcharges accounted for eight percentage points of the overall revenue growth.

Income from railway operations reached approximately $1.2 billion, up $52 million, or 5%, from the same period last year. Net income was $759 million, compared with $711 million in the third quarter of 2025. Diluted earnings per share increased 7% to $3.37.

On an adjusted basis, which excludes expenses associated with Norfolk Southern’s proposed merger with Union Pacific, the 2023 derailment in East Palestine, Ohio, and other charges in the year-earlier comparison, diluted earnings per share rose 10% to $3.62. Adjusted operating income was approximately $1.2 billion, up 7%.

“Norfolk Southern delivered another quarter of solid execution, with record revenues and strong earnings growth aided by continued productivity gains across the network,” Mark George, Norfolk Southern’s president and CEO, said in the company’s earnings announcement. He said the railroad remained focused on safe customer service, operational performance and cost control despite rising fuel costs.

Intermodal and merchandise revenue lead growth

Norfolk Southern’s three primary freight categories all produced higher revenue compared with the third quarter of 2025.

• Merchandise revenue: $2.2 billion, up 11%.
• Intermodal revenue: $919 million, up 21%.
• Coal revenue: $419 million, up 12%.

The intermodal increase is particularly relevant to the broader freight market because rail and trucking compete directly for some long-haul shipments. Norfolk Southern said demand for rail service increased during the quarter as tighter trucking capacity highlighted rail’s cost and capacity advantages for some shippers.

George said the company sees an opportunity to build a more efficient freight network by improving capacity and strengthening infrastructure. He also pointed to continued investment in a more resilient rail system that can support future growth.

Higher revenue did not improve the operating ratio

Although revenue and earnings increased, Norfolk Southern’s operating ratio moved in the wrong direction. The company reported a third-quarter operating ratio of 67.4%, compared with 64.6% a year earlier. The operating ratio measures operating expenses as a percentage of revenue, meaning a lower figure generally indicates stronger operating efficiency.

On an adjusted basis, the operating ratio was 65.4%, up from 63.3% in the third quarter of 2025. The higher ratio shows that expenses grew faster than the company’s underlying revenue improvement, even as productivity gains helped lift operating income.

For freight customers and transportation providers, the results present a mixed picture. Norfolk Southern moved more freight and generated stronger earnings, but the increase in operating costs placed pressure on margins. Fuel surcharges helped drive revenue higher, but they also reflect increased fuel expense across the transportation market rather than purely higher demand or pricing power.

What the results mean for trucking

Norfolk Southern’s comments offer another indication of how conditions in one freight mode can affect another. When trucking capacity becomes tighter, shippers may look more closely at rail, particularly for long-distance freight that can be moved through intermodal service. That shift can support rail volumes while also changing the competitive landscape for truckload and other highway freight.

The railroad’s 3% volume increase suggests that freight demand improved from the year-earlier period, but the revenue figures also show that fuel-related charges played a substantial role in the growth. Eight percentage points of the 14% revenue increase came from higher fuel surcharges, leaving the remaining growth to volume, pricing and changes in the freight mix.

For drivers and carriers, the broader significance is that railroads and trucking companies continue to compete for freight while also responding to the same operating pressures, including fuel costs, network capacity and shipper demand. Norfolk Southern’s results show that stronger freight activity can lift revenue without necessarily producing wider margins.

Norfolk Southern said it will continue emphasizing safe operations, service reliability, productivity and investment in its network. The company’s third-quarter results reflect a railroad handling more freight and earning more revenue, while still facing cost and efficiency challenges that remain important across the transportation industry.