March 4, 2024

A general view of the scene where a train carrying hazardous waste derailed in East Palestine, Ohio, U.S., March 2, 2023.

Alan Freed | Reuters

norfolk south The company had an initial $387 million bill for a February derailment in East Palestine, Ohio, that leaked toxic chemicals into the environment, it reported Wednesday.

The rail company said the charge contributed to a year-on-year drop in first-quarter profit.

Norfolk Southern said rail operating income was $711 million in the quarter, down 34% from the same period in 2022. Excluding the East Palestine derailment, rail operating revenues were $1.1 billion, up 1% from a year earlier.

net income of period It fell to $466 million, or $2.04 a share, from $703 million, or $2.93 a share, a year ago. This came despite a roughly 7% year-over-year increase in revenue to $3.13 billion.

Here’s how Norfolk Southern performed in the first quarter, compared to Refinitiv consensus estimates:

  • EPS: $3.32, adjusted to exclude East Palestine, vs. $3.12 expected
  • income: $3.13 billion vs. $3.11 billion expected

this earnings release Reaffirmed Norfolk Southern CEO Alan Shaw’s commitment to supporting Ohio’s cleanup efforts with a pledge of approximately $24 million in compensation and investment. The NTSB is reviewing the company’s organization and safety culture through a special investigation of the company.

These environmental cleanup and remediation activities contributed to the reported $387 million in charges, according to company executives. The cost also includes expected EPA-issued oversight costs to reimburse the government, but excludes some anticipated legal costs associated with the case, such as the Ohio suit, insurance recovery and recovery activities by other parties.

“That’s accruals as far as we know, we can be sure. It could change, no question, because we’re working with the Ohio AG, we’re working with the EPA,” Shaw told CNBC’s Morgan in an interview. Brennan. Interview Wednesday on “Closing Bell: Overtime.”

Shaw on Wednesday reiterated plans to install more sensors, accelerate the deployment of advanced early detection technology and increase safety training for first responders.

Norfolk Southern did not provide an estimate for further costs related to the East Palestine derailment.

Norfolk Southern CEO on Ohio derailment, safety measures and benefits

On Feb. 3, a Norfolk Southern freight train carrying 11 tanker trucks carrying dangerous goods derailed near the Ohio-Pennsylvania border. The train then ignited, raising concerns about the environmental and health impact in the community.

In March, both the Justice Department and the state of Ohio sued Norfolk Southern. Democratic Senators John Fetterman and Bob Casey of Pennsylvania and Sherrod Brown of Ohio introduced a new railroad accountability bill late last month, with parts Shaw endorsed.