Norfolk Southern Corp. (NSC)

Norfolk Southern reported third-quarter 2026 revenue of $3.5 billion on 22 October, a quarterly record, up 14 percent from a year earlier 1. Diluted earnings per share, profit per share of stock, were $3.37, up 7 percent 1. Higher fuel surcharges, extra charges billed to customers as fuel costs change, supplied eight points of the revenue growth 1.

Fuel also raised costs, so the operating ratio, the share of revenue used up by operating costs, rose to 67.4 percent from 64.6 percent 12. Excluding merger costs and the Eastern Ohio derailment, the company put the 2026 figure at 65.4 percent 1. Chief executive Mark George said a tighter trucking market highlighted rail's competitive advantages 1.

The larger open question is the agreed sale of the company to Union Pacific, which needs approval from the Surface Transportation Board 2. The board's schedule puts final briefs due on 28 May 2027, and FreightWaves wrote that it pushes a final decision well into the second half of 2027 5. If the agreement ends in specific circumstances, either railroad owes the other a $2.5 billion termination fee 2.

Merger-related costs were $42 million in the quarter and $145 million for the first nine months of 2026 2. The company suspended share repurchases when it signed the agreement 2.

Norfolk Southern says it and its predecessor companies have moved goods since 1827 3. The current parent company was incorporated on 23 July 1980 in Virginia and is based in Atlanta, Georgia 3. It owns one major freight railroad, Norfolk Southern Railway Company 3.

Its freight falls into three groups 3. In 2025 merchandise, a mix of farm goods, chemicals, metals and vehicles, made 63 percent of revenue, intermodal containers and trailers made 25 percent and coal made 12 percent 3.

On 3 February 2023 a train derailed in East Palestine, Ohio, with 11 tank cars of hazardous materials that the company did not own 3. A controlled vent and burn of five tank cars of vinyl chloride followed on 6 February 3. The company then became subject to many legal, regulatory and legislative proceedings that shaped its results for years 3.

Revenue then stayed nearly flat, at $12.16 billion in 2023, $12.12 billion in 2024 and $12.18 billion in 2025 3. In 2025 the operating ratio was 64.2 percent, and the company said growth in automotive and chemicals traffic lifted merchandise revenue 3.

Coal revenue fell in 2025 on lower pricing, a weaker mix of shipments and smaller fuel surcharges, partly offset by more volume 3. Intermodal volume dipped because less traffic started on the West Coast, competition rose and demand for premium shipments fell 3.

On 15 March 2024 the company acquired the 337 mile Cincinnati to Chattanooga line from the Cincinnati Southern Railway for $1.7 billion 3. It had operated the line under a lease that ended at the close 3.

In 2024 it also sold railway lines in Virginia and North Carolina, including the Manassas Line to the VPRA to support passenger rail in Virginia 3. Gains from those line sales were $433 million in 2024, which made the 2025 comparison harder 3.

On 28 July 2025 Norfolk Southern agreed to be acquired by Union Pacific in a stock-and-cash deal 2. Each Norfolk Southern share converts into one Union Pacific share plus $88.82 in cash 3. The railroads said the merger would create $2.75 billion in annual synergies within three years 6.

The Surface Transportation Board has not ruled on the merits 5. FreightWaves wrote that this is the first merger judged under the board's tougher 2001 review rules 5.

Merchandise

Merchandise is the largest line: farm and food goods, chemicals including crude oil, metals and building materials, and finished vehicles and parts 3. In 2025 the company handled 2.3 million merchandise carloads, 63 percent of railway revenue 3.

In the third quarter merchandise revenue was $2,188 million against $1,969 million a year earlier, up 11 percent 2. The 10-Q says higher fuel surcharge revenue, pricing and volume drove the rise 2.

Intermodal

Intermodal means containers and trailers moved by rail, then finished by truck or ship 3. The company says it offers the most extensive intermodal network in the eastern half of the U.S. and handled 4.1 million units in 2025 3.

Third-quarter intermodal revenue was $919 million against $759 million, up 21 percent 2. Ed Elkins, the chief commercial officer, said a tight truck market and high fuel costs favor moving domestic intermodal freight from highway to rail, while international intermodal is weighed down by trade uncertainty 4.

Coal

Coal is 12 percent of revenue, with 78.0 million tons handled in 2025 3. The company says it directly serves 18 coal-fired power plants and ships through terminals including Lamberts Point in Norfolk, Virginia, and the Port of Baltimore 3.

Third-quarter coal revenue was $419 million against $375 million, up 12 percent 2. Elkins said coal is expected to grow, led by exports 4.

Network and workforce

The railroad runs about 19,100 route miles in 22 states and the District of Columbia, with connections to every major container port on the Atlantic coast 31. Net properties are about $36 billion at historical cost 3.

It employed an average of 19,400 people in 2025, and about 80 percent of its railroad employees are covered by union agreements 3. Mark George has been chief executive since September 2024 after serving as chief financial officer 3.

Rivals

Its main rail rival is CSX Corporation, which works in much of the same territory 3. It also competes with trucks and barges, and with shippers who haul their own goods 3. The two railroads jointly own Conrail, a shared-assets company, discussed below 2.

Current problems

The company paid the final $285 million of its $600 million Eastern Ohio class settlement in March 2026 after the Supreme Court denied objectors' petition 2. The Center Square reported that the high court let stand the Sixth Circuit's ruling from November 7.

A federal consent decree, with a $15 million civil penalty and $57 million in oversight costs, awaits court approval, and the Ohio attorney general's case continues 2. A securities class action was certified on 29 September 2026, and the company asked an appeals court on 13 October to review that ruling 2.

Incident accruals, money set aside for legal matters, were $189 million at 30 September 2026 against $474 million at the end of 2025 2.

The umbrella, in words

The company's main subsidiary is Norfolk Southern Railway Company, and its filed list of subsidiaries also names General American Insurance Company, Norfolk Southern Properties, NS Fiber Optics and T-Cubed of North America 8. The list covers majority-owned companies, not stakes in others 8.

Norfolk Southern owns, with CSX, a limited liability company that controls Conrail, and it holds 58 percent of the economics and 50 percent of the votes 2. It also owns 19.78 percent of TTX, a railcar pool shared with six other railroads 2.

Union Pacific has agreed to acquire the whole company, a contract that needs the board's approval 2. A passive Vanguard Capital Management stake appears in a recent Schedule 13G 9.

Union Pacific and Norfolk Southern have said the merger needs Surface Transportation Board approval, and the board adopted a review schedule in its August decision 25. Final briefs are due 28 May 2027, and a final decision is due within 90 days after the record closes, provided the environmental review is done 5.

When the deal was announced, the companies targeted a closing by early 2027 6. FreightWaves wrote that the board's schedule pushes a final decision well into the second half of 2027 5.

The railroads said the combined company would run 52,215 route miles through 43 states 6. They also said it would create $2.75 billion in annual synergies within three years 6.

For 2026 the company expects property additions, its spending on track and equipment, of about $1.9 billion 3. It also expects an effective income tax rate between 23 percent and 24 percent 3.

Elkins said Norfolk Southern is broadly optimistic for the rest of 2026, while watching whether prolonged high gas prices soften consumer demand 4. Coal is expected to grow, led by exports 4.

Share repurchases stay suspended, because the merger agreement bars them without Union Pacific's consent 2. The company reported no repurchases in the first nine months of 2026 2.

Motions to dismiss the Pennsylvania school districts' class action, filed on 23 February 2024, are fully briefed and await a ruling 2. A challenge by some class members to their release of personal injury claims is pending before the Sixth Circuit 2. Motions in the shareholder derivative cases, filed on 8 June 2026, also remain pending 2.

Several court decisions are pending: the consent decree motion filed 10 October 2024, the appeal petition filed 13 October 2026, and the shareholder derivative complaints 2.