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Norfolk Southern Stock Rallies Despite Mixed Q4 Results, Forecasts Growth In 2025

Theodore QuinnWednesday, Jan 29, 2025 11:02 am ET

3min read

Norfolk Southern Corporation (NSC) shares surged on Wednesday, January 29, 2025, despite reporting mixed fourth-quarter results. The Atlanta-based railroad company's stock price climbed 4.38% to $263.37, driven by optimism about its growth prospects for the coming year. Although the company's revenue missed analysts' expectations, its earnings per share (EPS) surpassed estimates, and its outlook for 2025 indicated strong growth potential.

Norfolk Southern reported fourth-quarter revenue of $3.02 billion, which fell short of the consensus estimate of $3.03 billion. However, its adjusted EPS of $3.04 per share exceeded the expected $2.95 per share. For the full year, the company's revenue was $12.12 billion, and its adjusted EPS was $11.85, compared to the previous year's $11.57 per share.

The company's operating ratio, a key metric for railroad efficiency, improved significantly. In the fourth quarter, the operating ratio was 62.6%, compared to 73.7% in the same quarter of 2023. On an adjusted basis, the operating ratio was 64.9%, representing a 390-basis-point improvement from the adjusted fourth quarter of 2023.

Norfolk Southern's CEO, Mark George, expressed confidence in the company's prospects for 2025. He stated that the railroad is well-positioned to build on its success and drive long-term value for all stakeholders. The company expects revenue growth of approximately 3% year over year and a 150-basis-point improvement in its operating ratio.

The company's productivity initiatives and network efficiencies have translated into long-term growth and stakeholder value. Norfolk Southern's improved operating ratios, increased income from railway operations, volume growth, and customer satisfaction have positioned the company for future success. Its commitment to sustainability and carbon emission reduction also enhances its competitive position and long-term prospects.

In conclusion, Norfolk Southern's stock rallied despite mixed fourth-quarter results, driven by optimism about its growth prospects for 2025. The company's improved operating ratios, increased income from railway operations, volume growth, and customer satisfaction, along with its commitment to sustainability, have positioned it for long-term success. Investors should consider Norfolk Southern as a strong contender in the railroad industry, with a promising outlook for the coming year.

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