# Norfolk Southern Corporation (NSC) — Financial Analysis

**Exchange:** NYSE  
**Coverage as of:** 2026-Q2  
**Updated:** 2026-05-29  
**Tier:** Free primer (step 2 of 19)  
**Sibling pages:** /stocks/NSC/thesis · /stocks/NSC/memo

## Financial Snapshot

---
source: coverage-next-full
ticker: NSC
step: "04"
title: Financial Snapshot — 3-Year P&L Summary
created: 2026-05-29
---

### Step 04: Financial Snapshot

#### Three-Year P&L Summary

| Metric | 2022 | 2023 | 2024E |
|--------|------|------|-------|
| Railway Operating Revenue | $12,747M | $11,780M | $12,100M |
| Other Revenue | $317M | $288M | $280M |
| **Total Revenue** | **$13,064M** | **$12,068M** | **$12,380M** |
| Railway Operating Expenses | $8,186M | $8,652M | $8,200M |
| — Compensation & Benefits | $2,805M | $2,869M | $2,850M |
| — Purchased Services | $1,234M | $1,298M | $1,250M |
| — Fuel | $1,304M | $1,019M | $1,050M |
| — Depreciation | $1,190M | $1,224M | $1,260M |
| — Materials | $470M | $464M | $450M |
| — East Palestine charges | $0 | $803M | $300M |
| — Other | $1,183M | $975M | $1,040M |
| **Operating Income** | **$4,878M** | **$3,416M** | **$3,900M** |
| Operating Ratio (reported) | 62.7% | 71.7% | 66.2% |
| Operating Ratio (adjusted, ex-EP) | 62.7% | 65.5% | ~64.5% |
| Net Interest Expense | ($617M) | ($631M) | ($660M) |
| Other Income/Expense | $150M | $130M | $120M |
| Pre-tax Income | $4,411M | $2,915M | $3,360M |
| Income Tax Expense | ($1,012M) | ($700M) | ($805M) |
| Effective Tax Rate | 22.9% | 24.0% | ~24% |
| **Net Income** | **$3,399M** | **$2,215M** | **$2,555M** |
| Diluted EPS | $14.47 | $9.62 | $11.50-12.00 |
| Diluted Shares (avg) | 234.8M | 230.1M | ~220M |

*2024E figures are estimates based on Q1-Q3 actuals and Q4 guidance as of late 2024.*

#### East Palestine Derailment — Financial Impact

The February 2, 2023, derailment of a Norfolk Southern freight train in East Palestine, Ohio, became the defining financial event of NSC's 2023-2024 fiscal years. Key charges:

| Period | Cumulative EP Charges |
|--------|----------------------|
| Q1 2023 | ~$387M |
| Q2 2023 | ~$200M |
| Q3 2023 | ~$92M |
| Q4 2023 | ~$124M |
| Full Year 2023 | **~$803M** |
| 2024 (ongoing) | ~$200-400M (ongoing settlements) |
| **Cumulative through 2024** | **~$1.5-1.7B** |

NSC established a $1B accrual in mid-2023 and has subsequently increased it. The company entered into a consent decree with the EPA for remediation, and class action settlements are ongoing. Ultimate liability is estimated by analysts at $1.5-2.0B total (cumulative through resolution).

The derailment caused:
1. Massive reputational damage and congressional scrutiny
2. Temporary traffic diversions away from NSC by shippers
3. Enhanced safety capex (estimated $100-200M incremental in 2023-2024)
4. Leadership instability (CEO Alan Shaw departure in September 2024)

#### Key Margin Metrics

| Metric | 2022 | 2023 | 2024E |
|--------|------|------|-------|
| Gross Margin (Operating) | 37.3% | 28.3% | 33.8% |
| Adjusted Operating Margin | 37.3% | 34.5% | ~35.5% |
| EBITDA Margin | ~46% | ~38% | ~43% |
| Net Margin | 26.0% | 18.4% | ~20.6% |
| Free Cash Flow Margin | ~18-20% | ~12-15% | ~18-20% |

#### Free Cash Flow

| Metric | 2022 | 2023 | 2024E |
|--------|------|------|-------|
| Operating Cash Flow | ~$4,700M | ~$3,500M | ~$4,000M |
| Capital Expenditures | (~$2,100M) | (~$2,200M) | (~$2,200M) |
| **Free Cash Flow** | **~$2,600M** | **~$1,300M** | **~$1,800M** |
| FCF per Share | ~$11.00 | ~$5.65 | ~$8.20 |
| FCF Yield (at ~$220 stock) | ~5.0% | ~2.6% | ~3.7% |

Note: 2023 FCF was significantly compressed by East Palestine cash payments (~$600-800M in actual cash outflows during 2023). 2024 FCF recovery reflects partial normalization.

#### Revenue Bridge: 2022 → 2023

2022 was NSC's peak revenue year. The $975M decline in 2023 reflected:
- **Volume decline**: -6 to -8% across most commodity groups (post-COVID freight recession)
- **Fuel surcharge decline**: ~-$400M as diesel prices normalized from 2022 highs
- **Core pricing gains**: +3-4% partially offset volume/fuel headwinds
- **East Palestine traffic diversion**: Modest but measurable shipper avoidance

#### Peer Comparison: Key Financial Metrics (2024E)

| Metric | NSC | CSX | UNP |
|--------|-----|-----|-----|
| Revenue | ~$12.1B | ~$14.5B | ~$23.2B |
| Operating Ratio | ~64-66% | ~59-61% | ~60-62% |
| Operating Margin | ~34-36% | ~39-41% | ~38-40% |
| Net Margin | ~20-22% | ~26-28% | ~24-26% |
| EPS (diluted) | ~$11-12 | ~$2.10-2.20 | ~$11-12 |
| P/E (NTM) | ~18-22x | ~19-22x | ~20-23x |

*Note: EPS comparison can be misleading without adjusting for share count differences.*

#### Historical Context

NSC's OR improved dramatically from ~72-74% in 2012-2016 to ~62-63% by 2021-2022, reflecting:
- PSR (Precision Scheduled Railroading) adoption starting in 2019
- Locomotive fleet rationalization
- Train length optimization
- Terminal efficiency improvements

The East Palestine disruption reversed some of these gains operationally (service deterioration affected volume) and financially (charges inflated expense line). The 2024-2026 story is OR recovery toward the low-60s% with new management and activist-informed targets.

## Deeper Financial Analysis

The fundamental tier ($1.00) adds 8 dimensions not included here:

- Revenue Breakdown — segment revenue, geographic mix, product-line margins
- Financial Trends — QoQ momentum, leading indicators, inflection points
- Balance Sheet — debt structure, dilution risk, working capital dynamics
- Capital Allocation — ROIC, buyback cadence, reinvestment efficiency
- Earnings Analysis — beats/misses, guidance vs actuals, transcript highlights
- Competitive Positioning — market share, pricing power, peer benchmarks
- Industry Context — TAM, sector tailwinds/headwinds, regulatory backdrop

**API endpoint:** GET /api/v1/research/NSC/fundamental

## Navigation

- Overview: /stocks/NSC
- Financials (this page): /stocks/NSC/financials
- Thesis: /stocks/NSC/thesis
- Investment Memo: /stocks/NSC/memo
- Coverage universe: /stocks