Norfolk Southern’s third quarter results met revenue expectations but came in below analyst consensus on GAAP profit, reflecting a mixed operating environment. Management credited improvements in safety, operational efficiency, and productivity initiatives as key drivers, while also acknowledging flat overall volumes and competitive pressures stemming from the pending Union Pacific merger. CEO Mark George highlighted that, "the third quarter volume surges forecasted by partners didn’t materialize as expected, and the truck market remains oversupplied," suggesting that external factors weighed on the company’s performance despite internal progress.
Is now the time to buy NSC? Find out in our full research report (it’s free for active Edge members).
Norfolk Southern (NSC) Q3 CY2025 Highlights:
- Revenue: $3.10 billion vs analyst estimates of $3.11 billion (1.7% year-on-year growth, in line)
- Adjusted EPS: $3.30 vs analyst estimates of $3.20 (3% beat)
- Adjusted EBITDA: $1.49 billion vs analyst estimates of $1.47 billion (47.9% margin, 0.9% beat)
- Operating Margin: 35.4%, down from 52.3% in the same quarter last year
- Sales Volumes were flat year on year (6.8% in the same quarter last year)
- Market Capitalization: $62.72 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Norfolk Southern’s Q3 Earnings Call
- Scott Group (Wolfe Research) asked about the extent and duration of volume losses tied to the merger, to which Chief Commercial Officer Ed Elkins clarified losses are focused in intermodal, especially the Southeast, and may persist for several quarters before gradually recovering.
- Brandon Oglenski (Barclays) questioned balancing cost reductions with potential future growth needs. CEO Mark George and COO John Orr detailed how labor productivity and fuel efficiency gains allow for flexibility without impairing service quality.
- Jonathan Chappell (Evercore ISI) inquired about coal revenue pressure and its outlook. Elkins explained that while year-over-year declines will persist, sequential results should stabilize, with uncertainty remaining around export market demand.
- Thomas Wadewitz (UBS) asked about competitive risks in intermodal and the potential for further share losses to CSX. Management stressed the value of Norfolk Southern’s route structure and terminal network, expressing confidence in long-term retention of key business.
- Stephanie Moore (Jefferies) sought insight on integration risk with the Union Pacific merger. CEO Mark George emphasized a deliberate, cautious approach to integration, prioritizing operational strength and safety during the transition.
Catalysts in Upcoming Quarters
Looking ahead, the StockStory team will be monitoring (1) the pace and extent of intermodal volume recovery or further erosion as competitive responses to the merger play out, (2) the realization of targeted cost and productivity improvements, and (3) progress in safety metrics and the adoption of new technology for inspection and network reliability. Developments in the regulatory review and any milestones toward the Union Pacific merger will also be important signposts.
Norfolk Southern currently trades at $279.53, down from $283.78 just before the earnings. Is the company at an inflection point that warrants a buy or sell? The answer lies in our full research report (it’s free for active Edge members).
Our Favorite Stocks Right Now
When Trump unveiled his aggressive tariff plan in April 2025, markets tanked as investors feared a full-blown trade war. But those who panicked and sold missed the subsequent rebound that’s already erased most losses.
Don’t let fear keep you from great opportunities and take a look at Top 5 Strong Momentum Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025).
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-small-cap company Comfort Systems (+782% five-year return). Find your next big winner with StockStory today.
StockStory is growing and hiring equity analyst and marketing roles. Are you a 0 to 1 builder passionate about the markets and AI? See the open roles here.
