Norfolk Southern sees profits surge after fourth quarter recovery

In the United States, Norfolk Southern's fourth quarter results for 2024 showed a significant financial recovery. The railroad company earned $733 million, equating to $3.23 per share, an increase compared to $527 million or $2.32 per share from the previous year. This uplift was attributed to various one-time items, as the previous year's results were negatively impacted by extensive derailment cleanup costs. Additionally, during this quarter, the company benefitted from insurance payments related to the East Palestine, Ohio derailment and some successful sales of rail lines. These developments provided a much-needed boost to the company's bottom line, which surpassed analyst predictions of $2.94 per share. The CEO expressed optimism regarding future growth, expecting a revenue increase of 3% in 2025. This confidence is partly based on strong customer sentiments and anticipated support from the new federal administration in Washington, D.C. Unlike the previous year, when strict regulations were pushed for by the then current administration, it appears that the Republican-controlled Congress might ease some restrictions that could benefit the railroad industry. This shift may allow Norfolk Southern to adopt automated inspection technologies, replacing some traditional human inspections — a move that railroad executives believe could be beneficial for the industry as a whole. Concerns have been raised, however, about potential rollbacks on regulatory measures, particularly from Democratic legislators such as Chris Deluzio, who cautioned against loosening safety standards established post-derailment. Deluzio urged for stricter operating requirements for railroads, arguing that current safety protocols should not be sacrificed for economic relief measures. Despite warnings regarding potential tariff impacts on imports from Union Pacific's CEO, Norfolk Southern's leadership is less apprehensive, suggesting that declines in imports could be offset by increases in domestic production and onshoring. This sentiment underscores the strategic role the railroad plays in the U.S. economy, with confidence that they will continue to facilitate the movement of goods regardless of changing trade dynamics. Furthermore, the company's ongoing litigation related to the East Palestine derailment is expected to cost nearly $2.2 billion in total, underlining the financial burdens that rail companies may face as a consequence of operational incidents.