Norfolk Southern (NYSE:NSC) Q3 2025 Earnings Call October 23, 2025 04:30 PM ET Speaker0Good afternoon, ladies and gentlemen, and welcome to Norfolk Southern Third Quarter twenty twenty five Earnings Conference Call. At this time, all participant lines are in a listen only mode. Following the presentation, we will conduct a question and answer session. And I would like to turn the conference over to Luke Nichols, Senior Director, Investor Relations. Please go ahead.Speaker1Good afternoon, everyone. Please no ...

Financial Performance - Railway operating revenues for Q3 2025 were $3,103 million, a 2% increase from $3,051 million in Q3 2024[110] - Railway operating expenses rose to $2,005 million in Q3 2025, a 38% increase compared to $1,455 million in Q3 2024[110] - Net income for Q3 2025 decreased to $711 million, down 35% from $1,099 million in Q3 2024[110] - Diluted earnings per share for Q3 2025 were $3.16, a 35% decline from $4.85 in Q3 2024[110] - The operating ratio for Q3 2025 was 64.6%, significantly higher than 47.7% in Q3 2024, indicating increased operating expenses[110] - For the first nine months of 2025, railway operating revenues reached $9,206 million, a 1% increase from $9,099 million in the same period of 2024[110] - Net income for the first nine months of 2025 was $2,229 million, an 18% increase from $1,889 million in the first nine months of 2024[110] - The adjusted operating ratio for Q3 2025 improved to 63.3% from 63.4% in Q3 2024[114] - Adjusted net income for the first nine months of 2025 was $2,091 million, a 5% increase compared to $1,996 million in 2024[116] Revenue Breakdown - Merchandise revenues rose by 6% in the third quarter and 3% in the first nine months, driven by higher volume and increased average revenue per unit[118] - Intermodal revenues decreased by 1% in the third quarter but increased for the first nine months, attributed to higher volumes[125] - Coal revenues declined by 12% in the third quarter and 7% in the first nine months due to lower average revenue per unit and adverse mix[118] - Railway operating revenues increased by $52 million (2%) in the third quarter and $107 million (1%) in the first nine months of 2025 compared to the same periods in 2024[119] - Average revenue per unit for merchandise increased by 1% in the third quarter and remained flat in the first nine months[118] Expenses and Costs - Compensation and benefits expenses increased by 7% in the third quarter and 2% in the first nine months, totaling $2,169 million[129] - Fuel expenses rose by 10% in the third quarter but decreased by 8% in the first nine months, with locomotive fuel prices increasing by 11% in the third quarter[133] - Materials expense rose due to higher intermodal and engineering material consumption, with locomotive material consumption also increasing in the third quarter[136] - Total railway operating expenses for the first nine months of 2025 decreased by 6% to $5,787 million from $6,159 million in 2024[129] - Incentive and stock-based compensation increased by $52 million for the quarter and $105 million for the first nine months[135] Strategic Developments - The company entered into a Merger Agreement with Union Pacific on July 28, 2025, aiming to create America's first transcontinental railroad[109] - The absence of $380 million in gains from the sale of railway lines in 2024 significantly impacted the financial results comparison[109] - Gains from the sale of railway lines in Virginia and North Carolina totaled $380 million in 2024, with significant land sales expected to drive future traffic volumes[137] Cash Flow and Capitalization - Cash provided by operating activities was $3.3 billion for the first nine months of 2025, up from $3.1 billion in the same period of 2024[144] - Cash used in investing activities decreased to $1.9 billion for the first nine months of 2025, down from $2.8 billion in the prior year[145] - Cash used in financing activities increased to $1.6 billion for the first nine months of 2025, compared to $903 million in the same period last year[146] - The debt-to-total capitalization ratio improved to 53.0% at September 30, 2025, from 54.6% at December 31, 2024[152] Tax and Compliance - The effective tax rate for both the third quarter and first nine months of 2025 was 23.1%, compared to 23.0% and 21.3% for the same periods last year[142] - The company has not identified any changes in internal control over financial reporting that have materially affected its internal control during Q3 2025[164] - As of September 30, 2025, the company's disclosure controls and procedures were effective in alerting management to material information required for periodic filings[163] Share Repurchase - The company has $6.3 billion authorized for future share repurchase activity, although repurchases are currently suspended due to the Merger Agreement[146] Restructuring Charges - Restructuring and other charges amounted to $12 million in the third quarter of 2025, compared to $60 million in 2024[139]

The railroad company, which agreed to sell itself to Union Pacific in July, reported a profit of $711 million and upped its productivity target to $200 million. ...

Q3 2025 EARNINGS CALL October 23, 2025 FORWARD-LOOKING STATEMENTS / NON-GAAP MEASURES This presentation and the related materials contain "forward-looking statements" within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995, as amended. These statements relate to future events or future performance of Norfolk Southern Corporation (NYSE: NSC) ("Norfolk Southern," "NS," the "Company," "we," "our," or "us") and involve known and unknown risks, uncertainties, an ...

Exhibit 99.2 Norfolk Southern Corporation and Subsidiaries Consolidated Statements of Income (Unaudited) | | | Third Quarter | First Nine Months | | | --- | --- | --- | --- | --- | | | 2025 | 2024 | 2025 | 2024 | | | | (in millions, except per share amounts) | | | | Railway operating revenues | | | | | | Merchandise | $1,969 | $1,861 | $5,804 | $5,628 | | Intermodal | 759 | 763 | 2,262 | 2,250 | | Coal | 375 | 427 | 1,140 | 1,221 | | Total railway operating revenues | 3,103 | 3,051 | 9,206 | 9,099 | | Railw ...

Norfolk Southern touted efficiency gains, strong service levels, and safety improvements as third-quarter revenue fell short of expectations and competitive pressure ratcheted up by BNSF and CSX. “Norfolk Southern delivered another quarter of strong results on safety, service, and productivity through a dynamic freight market,” Chief Executive Mark George said in a release Thursday, after the close of markets. “The entire Thoroughbred team pulled together to serve our customers, achieve an all-time record ...

Norfolk Southern Corp. reported third quarter income of $1.1 billion on revenue that was 2% higher at $3.1 billion despite flat freight volumes. Diluted earnings per share was $3.16, down from the prior year and short of Wall Street’s forecast range of $3.18 to $3.22. The earnings for the Atlanta-based carrier (NYSE: NSC) came after the close of markets and on the same day proposed merger partner Union Pacific (NYSE: UNP) reported its earnings. Income from railway operations was lower than the previous ...

Union Pacific Corp. (NYSE: UNP) on Thursday said third-quarter earnings were $1.79 billion on revenue of $6.24 billion. The Omaha, Nebraska-based company said per-share profit was $3.01. Adjusted earnings for costs related to its proposed transcontinental merger with Norfolk Southern (NYSE: NSC) were $3.08 per share. The results exceeded expectations of revenue of $6.23 billion and $2.99 EPS of seven analysts surveyed by Zacks Investment Research. Norfolk Southern reports earnings Thursday after the clo ...

Financial Performance - Union Pacific's reported operating income for the third quarter of 2025 was $2.5 billion, a 6% increase compared to the third quarter of 2024[13] - The adjusted operating income was $2.6 billion, a 7% increase compared to the same period[13] - The reported operating ratio was 59.2%, a 1.1 percentage point improvement compared to the third quarter of 2024[13] - The adjusted operating ratio was 58.5%, a 1.8 percentage point improvement[13] - Net income was reported at $1.8 billion, a 7% increase year-over-year, while adjusted net income also stood at $1.8 billion, reflecting a 9% increase[13] - Reported earnings per share (EPS) was $3.01, a 9% increase, and adjusted EPS was $3.08, a 12% increase compared to the third quarter of 2024[13] Revenue and Volume - Total freight revenue reached $5.927 billion, a 3% increase compared to the third quarter of 2024[17] - Bulk commodity revenue was $1.930 billion, a 7% increase compared to the third quarter of 2024, with a volume of 530 thousand, also a 7% increase[31] - Industrial commodity revenue was $2.194 billion, a 3% increase, with a volume of 574 thousand, also a 3% increase[31] - Premium commodity revenue was $1.803 billion, a 2% increase, with a volume of 1059 thousand, a 5% increase[31] Cash Flow and Capital Allocation - Union Pacific generated $7.1 billion in cash from operations year-to-date[22] - The company returned $5.1 billion to shareholders[26] - Free cash flow was $1.9 billion[26] - The company's capital plan includes $3.4 billion in investments[25]

OMAHA, Neb. (AP) — Union Pacific delivered 7% growth in its third-quarter earnings Thursday as its CEO continues to make the case for the potential benefits of acquiring one of the railroad's eastern rivals. The Omaha, Nebraska-based railroad said it earned $1.79 billion, or $3.01 per share, in the quarter. That's up from $1.67 billion, or $2.75 per share, a year ago. And without $41 million in merger costs the railroad would have made $3.08 per share but either number would have beat the Wall Street esti ...