Norfolk Southern shares declined Friday after reporting earnings that missed estimates.
The railway company said macroeconomic pressures and a slowdown in demand for freight shipments weighed on its results.
Norfolk Southern reportedly plans to cut 7% of its management and staff positions.
Norfolk Southern Corp. (
NSC
) shares lost 1.3% in intraday trading Friday after the railway company posted results that missed estimates amid macroeconomic pressures and a slowdown in demand for freight shipments.
The company reported fourth-quarter
net income
slumped 33% from a year ago to $527 million as it took a $150 million charge, inclusive of $76 million in
insurance
payments, to cover the costs of a February 2023 train derailment in East Palestine, Ohio. That lifted total full-year costs for the accident to $1.1 billion.
Earnings adjusted for non-recurring costs came in at $2.83 per share, and on a diluted basis were $2.32 a share. Revenue was down 5.2% at $3.07 billion. Both missed estimates.
Chief Executive Officer (CEO)
Alan Shaw said in an earnings call that 2023 was a “historically challenging year” with the East Palestine crash, and a weak freight market.
Norfolk Southern reportedly plans to lay off 7% of its non-union workforce, or approximately 330 employees to cut costs.
Without directly acknowledging the reported job cuts, Shaw said in the earnings call that the persistently weak freight market, an adverse
macroeconomic
environment, and the limited amount of business Norfolk Southern can attract makes its cost structure too high for its revenue.
Shares of Norfolk Southern were down 1.3% at $234.85 per share as of at about 3:30 p.m. ET Friday and in negative territory for the past year.
