Norfolk Southern says Baltimore bridge collapse's cost is more than $25 million per month

By James Rogers

Norfolk Southern has confirmed that its first-quarter results were in line with its preliminary results released earlier this month.

Norfolk Southern Corp. is seeing some pressure in its coal business following the collapse of the Francis Scott Key Bridge in Baltimore last month, the railroad operator said Wednesday.

Before market open Wednesday, Norfolk Southern (NSC) confirmed that its first-quarter results were in line with its preliminary results released earlier this month - despite the impact of the Baltimore bridge collapse during a conference call to discuss the results.

"There is some pressure to our coal business from the Baltimore Bridge disruption," said Norfolk Southern CFO Mark George. Despite the port closure, George said that Norfolk Southern still expects to be within its 67% to 68% operating ratio guidance range for the first half of the year, assuming that the channel reopens at the beginning of June. "The revenue impact from the channel closure is in the $25 million to $35 million per month range," he added.

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Norfolk Southern shares fell 4.7% Wednesday, outpacing the S&P 500 index's SPX decline of 0.4%.

Chief Marketing Officer Ed Elkins said coal volumes will be challenged as high stockpiles and low natural gas prices reduce utility shipments. "In addition, export shipments will be affected by the Baltimore port shutdown," he said. "We are diligently working with our customers to provide alternate supply chain solutions, and the increased network fluidity is providing the capacity necessary to execute on those solutions."

Elkins also noted that seaborne coal prices have weakened as supply has outstripped global demand, a headwind that is expected to continue throughout the remainder of the year.

Related: CSX 'solid and steady' despite Baltimore bridge collapse, say analysts

When Norfolk Southern released its preliminary results, the company said it expects the Baltimore bridge collapse to have a $50 million to $100 million impact on second-quarter revenue. Last week rival CSX Corp., which has been described as the most affected by the Baltimore bridge collapse among major North American railroad operators, said it could lose between $25 million and $30 million in sales a month due to the port closure in the city.

CSX shares were down 3.3% Wednesday.

-James Rogers

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04-24-24 1257ET

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