Norfolk Southern's derailment insurance payments provide boost but even without that profits were up

Norfolk Southern's quarterly profits were again inflated by insurance payments related to its disastrous 2023 derailment in eastern Ohio, but even without that, the railroad's profits still grew.

The Atlanta-based railroad reported a major rebound in its results Wednesday with $750 million profit, or $3.31 per share, in the first quarter. Last year, the first quarter results of $53 million, or 23 cents per share, were held down by the $600 million class action settlement the railroad agreed to pay residents near the East Palestine derailment.

Since last year's second quarter, Norfolk Southern has been consistently collecting more in insurance payments than it was spending on the derailment cleanup and response, so its bottom line has received a boost each of the last several quarters. In the first quarter, the insurance payments boosted the railroad's net income by $141 million. Without that, it would have earned $609 million, or $2.69 per share, compared to $2.49 per share last year.

Wall Street analysts focus on ongoing operations, which strips out the insurance windfall, and by that measure the railroad beat the average estimate reported by FactSet Research by 3 cents per share.

The railroad has received close to $1 billion in insurance payments to date to help cover the roughly $2 billion it has spent since the East Palestine derailment. Chief Financial Officer Jason Zampi said he expects less than $100 million in remaining insurance payments to come in.

The railroad's revenue was essentially flat at just under $3 billion, but it was able to continue cutting expenses as part of its larger effort to get more efficient even as it dealt with roughly $35 million of winter storm related costs.

Norfolk Southern CEO Mark George said the railroad overcame disruptive winter weather during the first three months of the year to improve service and efficiency. The railroad also delivered about 1% more shipments in the quarter because consistent service is helping it win new business. Norfolk Southern's main competitor in the East, CSX railroad, posted a 1% decline in volume during the quarter as two major construction projects and the storms disrupted its network, so it appears that some shipments shifted between the two railroads.

“Our service performance is increasing our customers’ confidence in Norfolk Southern and allowing us to gain share,” George said in a statement.

He still predicts that Norfolk Southern will generate another $150 million of productivity improvements this year while seeing revenue grow roughly 3% although the overall economy could derail that if it takes a downturn after President Donald Trump's tariffs all take effect.

George said the railroad is hearing fears about the possibility for a recession later this year so Norfolk Southern is keeping a close eye on volume, but companies haven't started to cut shipments yet.

“There’s no way to predict where we go right now. We’re in a really uncertain spot,” George said. “But we haven’t seen negative trends yet that really alarm us.”

Edward Jones analyst Jeff Windau said the economic environment and Trump's trade policy seem to almost be changing daily, so that makes it hard for businesses to plan.

“The rails are going to be impacted by the overall economy. But they’re still seeing some good opportunities. And they’re still able to deliver on their expectations,” Windau said. “So far things seem to be going OK yet this year.”

The Atlanta-based railroad is one of the biggest in the nation with tracks throughout the Eastern United States.

A year ago, Norfolk Southern was also in the midst of a fight with an outside investor that wanted to fire management and overhaul the railroad's operations. That investor, Ancora Holdings, won three board seats, and Norfolk Southern later changed CEOs after the board learned that former CEO Alan Shaw had an inappropriate relationship with a subordinate.

Shares of the company rose about 3% in early trading before settling back down a bit. The stock was trading up about 1.6% at $223.47 around midday.

FILE - A Norfolk Southern freight train passes through Homestead, Pa., Wednesday, March 12, 2025. (AP Photo/Gene J. Puskar, File)

PITTSBURGH (AP) — Dave Giusti, a reliable reliever who spent 15 years in the majors and helped the Pittsburgh Pirates win the 1971 World Series title, has died. He was 86.

The club, citing Giusti's family, said he died on Sunday.

The right-hander went 100-93 with a 3.60 ERA in 668 career appearances for five clubs from 1962-77. He began his career as a starter in Houston but had his greatest success with the Pirates, who acquired him from St. Louis in October 1969 and then moved him to the bullpen full-time.

Giusti led the National League with 30 saves in 1971, then added 10 2/3 scoreless innings in the playoffs as the Pirates beat the Giants in the NLCS and then the Baltimore Orioles in seven games in the World Series.

Giusti made his lone All-Star appearance in 1973. He played seven seasons for Pittsburgh, registering 133 saves, which ranks third in franchise history. He split time between Oakland and the Chicago Cubs in 1977 before retiring.

A native of Seneca Falls, New York, Giusti played collegiately at Syracuse before being signed by Houston, then an expansion team known as the Colt .45s, as an amateur free agent. He appeared in 22 games as a rookie in 1962, spent all of 1963 in the minors before returning to the majors for good after being called up during the 1964 season.

Giusti is survived by his wife, two daughters and four grandchildren.

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FILE - Pitcher Dave Giusti, a member of the 1971 World Champion Pittsburgh Pirates, takes part in a celebration of the 50th anniversary of the championship season before of a baseball game between the Pittsburgh Pirates and the New York Mets in Pittsburgh, July 17, 2021. (AP Photo/Gene J. Puskar, File)