Norfolk Southern Earnings: Intermodal Volume Improving, but Margin Pressure Lingers

Eastern Class-I railroad Norfolk Southern’s first-quarter revenue fell 4% year over year on easing storage income, lower fuel surcharges, unfavorable mix, lower benchmark coal pricing, and elevated truckload sector competition for intermodal. On the other hand, consolidated volume growth accelerated and merchandize carload core-pricing remains healthy—similar to peer CSX. Revenue mostly met our expectations, though intermodal pricing deteriorated more than we anticipated on truck competition.