Norfolk Southern misses profit estimates, says it took $1.1 billion hit from derailment in 2023
(Reuters) - Norfolk Southern reported fourth-quarter profit below analysts' estimates on Friday, hurt by lower revenue across the U.S. railroad operator's merchandise, intermodal and coal businesses, sending its shares down more than 3%.
Norfolk also said it took a fresh charge of $150 million in the quarter net of $76 million in insurance recoveries, taking the total expense associated with a derailment to $1.12 billion in 2023.
A Norfolk train comprising three locomotives and 150 freight cars derailed near East Palestine, Ohio, last February, sending a cloud of smoke over the town and causing temporary evacuation for thousands of residents.
Chief Executive Alan Shaw said the company would focus on driving "productivity gains and operational discipline" through aggressive cost management this year.
On an adjusted basis, the company reported a profit of $2.83 per share, compared with analysts' estimates of $2.87, according to LSEG data.
Norfolk has now missed profit estimates for three consecutive quarters.
The Atalanta, Georgia-based freight railroad carrier's net income fell to $527 million, or $2.32 per share, in the quarter from $790 million, or $3.42 per share, a year earlier.
Post-pandemic changes in U.S. consumer spending, shifting from goods to services, combined with global shipping delays, have left freight railroads operating in a low volume environment.
The East Coast carrier reported total operating revenue of $3.07 billion, down 5.2% from a year earlier. Analyst on average had expected revenue of $3.08 billion.
(Reporting by Abhinav Parmar; Editing by Maju Samuel)
