Norfolk Southern Net Income Falls 27% to $547M in Q1 2026

Norfolk Southern Corp (NYSE: NSC), a major freight railroad operator, reported net income of $547 million for the quarter ending March 31, 2026, down 27% from $750 million in the year-ago quarter. The decline came despite revenue holding essentially steady at $2.998 billion compared to $2.993 billion in the first quarter of 2025. Read more earnings reports.

Operating income fell sharply to $877 million from $1.146 billion in the prior-year period, a 23% decline. The company's operating margin compressed as labor and related expenses remained flat at $740 million while the bottom line deteriorated.

Diluted earnings per share came in at $2.43, down from $3.31 a year earlier. The company had 225 million weighted average diluted shares outstanding for the quarter, compared to 226.5 million in Q1 2025.

Revenue Breakdown

The railroad's merchandise segment generated $1.885 billion in revenue for the quarter, up slightly from $1.863 billion in the prior year. Intermodal revenue declined to $749 million from $760 million, while other revenue fell to $364 million from $370 million.

Within the merchandise category, coal revenue dropped to $625 million from $636 million. Intermodal and agriculture revenue came in at $567 million, up from $535 million in Q1 2025.

Cash Flow Pressures

Cash from operations dropped sharply to $344 million from $950 million in the first quarter of 2025, a 64% decline. The company used $213 million in investing activities, down from $1.021 billion a year earlier. Financing activities consumed $320 million compared to $564 million in the prior-year period.

Cash and cash equivalents stood at $1.341 billion as of March 31, 2026, down from $1.530 billion at year-end 2025 and above the $1.006 billion reported at the end of the first quarter last year.

Balance Sheet

Total assets declined slightly to $45.113 billion from $45.236 billion at December 31, 2025. Current assets fell to $3.024 billion from $3.198 billion over the same period.

Accounts receivable increased to $1.123 billion from $988 million at year-end. Property, plant and equipment edged down to $36.442 billion from $36.479 billion.

Total liabilities decreased to $29.309 billion from $29.689 billion at the end of 2025. Current liabilities dropped to $3.335 billion from $3.775 billion, while accounts payable fell to $1.695 billion from $1.863 billion.

Stockholders' equity rose to $15.804 billion from $15.547 billion at year-end. Retained earnings increased to $13.477 billion from $13.235 billion, while additional paid-in capital rose to $2.312 billion from $2.296 billion. Common shares outstanding stood at 224.6 million as of March 31, 2026.

Income Tax

Income tax expense fell to $168 million from $228 million in the year-ago quarter, reflecting the lower pre-tax income.