Norfolk Southern Q3 revenue rises 14% and railroad lifts 2026 cost outlook

Lead

23 October 2026 — Atlanta, Georgia. Norfolk Southern reported third-quarter 2026 results in a Railway Supply report published 23 October 2026. The company disclosed record quarterly railway operating revenues of $3.53 billion and provided an updated 2026 outlook that raises adjusted operating expenses to about $9.0 billion. The report includes detailed line-item revenue and expense changes, adjusted results excluding specified charges, and commentary on operating metrics and merger-related developments.

Verified facts

Norfolk Southern reported railway operating revenues of $3.53 billion for third-quarter 2026, a 14% increase year over year. The company said traffic volume increased 3% and that higher fuel surcharges accounted for eight percentage points of the 14% revenue gain, quantified as $260 million of the $423 million increase. Excluding fuel surcharges, revenue rose 6% to $3.06 billion.

By business group, the company reported volume for each group up 3%. Intermodal revenue was $919 million, up 21%; coal revenue was $419 million, up 12%; and merchandise revenue was $2.19 billion, up 11% versus third-quarter 2025.

Total railway operating expenses were $2.38 billion, up 19% year over year. Fuel expense rose 77% to $420 million. Materials and other expense increased 52% to $224 million, with the report citing lower land sales as a partial factor. Income from railway operations was $1.15 billion, up 5%, and the reported operating ratio was 67.4%, versus 64.6% in the year-ago quarter. Net income was $759 million, or $3.37 per diluted share, compared with $711 million, or $3.16, a year earlier.

Norfolk Southern published adjusted results that exclude merger-related expenses tied to its planned combination with Union Pacific, costs related to the Eastern Ohio incident (the February 2023 derailment in East Palestine, Ohio) and restructuring charges booked in 2025. In the third quarter, the company reported $42 million of merger-related costs and $28 million of Eastern Ohio incident costs. On the adjusted basis, operating income was $1.22 billion (a 7% increase), the adjusted operating ratio was 65.4% (a 2.1-point increase), and adjusted earnings per share were $3.62 (a 10% increase).

For full-year 2026 guidance, Norfolk Southern now expects adjusted operating expenses of about $9.0 billion. In July 2026 the company had projected $8.8 billion to $8.9 billion; its original earlier forecast was $8.2 billion to $8.4 billion. Norfolk Southern estimated that additional fuel cost versus its original guidance is roughly $700 million, up from the $400 million to $500 million estimate provided in July. The company now expects 2026 capital spending of about $2.1 billion, up from the $1.9 billion projected in July and below the 2025 capital spending level. Over the first nine months of 2026, revenue rose 9% to $9.99 billion and net income fell 8% to $2.04 billion; the operating ratio for the period was 68.5% compared with 62.9% a year earlier. The report noted the 2025 period included a net credit of $243 million on the Eastern Ohio incident line.

Organizations and responsibilities

Norfolk Southern — reported third-quarter 2026 financial and operating results, disclosed adjusted results and updated full-year 2026 outlooks, and quantified merger-related and Eastern Ohio incident costs for the quarter. The company provided operational metrics including train speed and terminal dwell comparisons between quarters.

Union Pacific — identified as Norfolk Southern’s proposed merger partner; the Railway Supply report noted Union Pacific’s separate third-quarter results and its expectation that the merger will be completed in the second half of 2027. The report referenced Union Pacific’s third-quarter operating revenues of $7.20 billion and an operating ratio of 59.1%.

Surface Transportation Board (STB) — described in the report as the regulator that adopted a procedural schedule on 18 August 2026 and, on 18 September 2026, denied motions to dismiss the companies’ revised merger application. The combination requires STB approval.

Railway Supply — the source organization that published the report summarized here.

Operational and commercial context

According to the report, Norfolk Southern said fuel surcharge increases supplied most of the revenue growth in the quarter, and the company attributed part of the higher expense base to elevated fuel costs and to absorbing higher volumes. The company said train speed improved 5% and terminal dwell improved 3% between the second and third quarters, and that these improvements occurred despite significant washouts in its service region. The report noted Norfolk Southern's commentary that demand for rail service grew during the quarter as a tighter trucking market underscored rail’s competitive strengths; this is attributed to the company’s statement. The report also referenced Union Pacific’s contemporaneous results, noting both carriers faced elevated locomotive fuel prices and that Union Pacific reported an average price-per-gallon increase of 64% year over year. The STB procedural actions cited are presented as reported developments affecting the merger timetable; the report states Union Pacific expects the merger to be completed in the second half of 2027.

Sources

https://www.railway.supply/norfolk-southern-q3-revenue-rises-14-and-railroad-lifts-2026-cost-outlook/ — Railway Supply

Disclosure

This RailZoom Intelligence Brief is an original synthesis based on the cited public source. Details not confirmed by a first-party announcement are identified as reported information. For overseas project development or industry intelligence cooperation, contact RailZoom.