Norfolk Southern | 8-K: FY2025 Q2 Revenue Misses Estimate at USD 3.11 B

LB filings
2025.07.29 12:14
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Revenue: As of FY2025 Q2, the actual value is USD 3.11 B, missing the estimate of USD 3.132 B.

EPS: As of FY2025 Q2, the actual value is USD 3.41, beating the estimate of USD 3.2991.

Financial Metrics by Segment

Segment Revenue

  • Railway Operating Revenues: $3.1 billion for the second quarter of 2025, an increase of $66 million compared to the second quarter of 2024, with a volume growth of 3%.
  • Railway Operating Revenues Less Fuel Surcharge: $2.9 billion, up $122 million or 4% compared to the adjusted second quarter of 2024.
  • Merchandise: $1,972 million (Q2 2025), $1,904 million (Q2 2024), $3,835 million (H1 2025), $3,767 million (H1 2024).
  • Intermodal: $743 million (Q2 2025), $742 million (Q2 2024), $1,503 million (H1 2025), $1,487 million (H1 2024).
  • Coal: $395 million (Q2 2025), $398 million (Q2 2024), $765 million (H1 2025), $794 million (H1 2024).
  • Total railway operating revenues: $3,110 million (Q2 2025), $3,044 million (Q2 2024), $6,103 million (H1 2025), $6,048 million (H1 2024).

Operational Metrics

  • Income from Railway Operations: $1.2 billion, an increase of $44 million compared to the second quarter of 2024. Adjusted income from railway operations was $1.1 billion, up $75 million or 7% compared to the adjusted second quarter of 2024.
  • Operating Ratio: 62.2% for the quarter, compared to 62.8% in the second quarter of 2024. Adjusted operating ratio was 63.4%, representing a 170 basis points improvement from the adjusted second quarter of 2024 which was 65.1%.
  • Diluted Earnings Per Share (EPS): $3.41, up from $3.25 in the second quarter of 2024. Adjusted diluted EPS was $3.29, up $0.23 or 8% compared to the adjusted second quarter of 2024.
  • Net income: $768 million (Q2 2025), $737 million (Q2 2024), $1,518 million (H1 2025), $790 million (H1 2024).
  • Operating profit (Income from railway operations): $1,175 million (Q2 2025), $1,131 million (Q2 2024), $2,321 million (H1 2025), $1,344 million (H1 2024).
  • Operating expenses: $1,935 million (Q2 2025), $1,913 million (Q2 2024), $3,782 million (H1 2025), $4,704 million (H1 2024).
  • Earnings per share – diluted: $3.41 (Q2 2025), $3.25 (Q2 2024), $6.72 (H1 2025), $3.48 (H1 2024).
  • Operating Expenses: $1,972 million in Q2 2025, compared to $1,981 million in Q2 2024, showing a slight decrease.
  • Operating Income: $1,138 million in Q2 2025, up from $1,063 million in Q2 2024, representing a 7% increase.
  • Operating Ratio: Improved to 63.4% in Q2 2025 from 65.1% in Q2 2024, indicating better efficiency.
  • Net Income: $741 million in Q2 2025, a 7% increase from $694 million in Q2 2024.
  • Earnings Per Share (EPS): $3.29 in Q2 2025, up from $3.06 in Q2 2024, marking an 8% increase.

Cash Flow

  • Net cash provided by operating activities: $2,027 million (H1 2025), $1,875 million (H1 2024).
  • Net cash used in investing activities: - $1,435 million (H1 2025), - $2,567 million (H1 2024).
  • Net cash used in financing activities: - $930 million (H1 2025), - $217 million (H1 2024).
  • Net decrease in cash and cash equivalents: - $338 million (H1 2025), - $909 million (H1 2024).

Unique Metrics

  • Eastern Ohio Incident: Recoveries exceeded expenses by $232 million (H1 2025) compared to expenses of $527 million (H1 2024).
  • Stock Repurchase Program: Repurchased and retired 1.9 million shares of common stock at a cost of $455 million in H1 2025, no repurchases in H1 2024.
  • Adjusted Operating Ratio: The company expects the Q3 2025 adjusted operating ratio to be pressured due to a soft revenue environment at the start of the quarter.

Outlook / Guidance

  • Norfolk Southern expects revenue growth of 2%-3% for the full year 2025 compared to 2024. Adjusted operating ratio improvement for 2025 is expected to be 100-150 basis points better than 2024, although the third quarter of 2025 is expected to face pressure due to a weaker than expected revenue environment early in the quarter. The company has raised expected productivity savings in 2025 to $175+ million due to strong results from cost-control and targeted initiatives.
  • Norfolk Southern Corporation anticipates annual cost savings of $175 million or more, with revenue growth projected between 2% and 3% for 2025. The company has ceased its share repurchase program.
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