MW Tariffs are an uncertainty but not a worry, railroad operator Norfolk Southern says

By Tomi Kilgore

Whether products are coming across the border or made in the U.S., Norfolk will still move it, company's CEO says

Shares of Norfolk Southern Corp. bounced Wednesday, as the railroad operator helped dispel fears about potential tariffs that had caused a selloff in the previous session.

On a call with analysts after Norfolk's $(NSC)$ fourth-quarter results, the company was asked about potential tariff headwinds to transport volumes over the course of the year. There was also a question about whether those expected headwinds may lead to extra restocking by shippers, which may even benefit rail operators.

Chief Executive Mark George clarified his view that while there is certainly "uncertainty around tariffs," he didn't necessarily view them as a headwind for Norfolk. He said that if those who produce goods are suddenly subjected to tariffs, how they respond may vary and how things play out may change over time.

But for Norfolk, which transports those goods, whether the product is "coming across the border as an import or whether it's now being produced domestically due to [tariffs], we're going to be there to move it," George said, according to an AlphaSense transcript.

George's comments came a day after Norfolk's stock had slumped 2.9% and helped lead the Dow Jones Transportation Average DJT to a 0.9% loss, on a day when the S&P 500 index SPX surged 0.9%. Among fellow rail operators, shares of CSX Corp. $(CSX)$ had dropped 2.9% on Tuesday and Union Pacific Corp.'s stock $(UNP)$ had shed 2.1%.

On Wednesday, Norfolk's stock rose 1.8% to close at $256.74.

Separately, Norfolk also reported a fourth-quarter profit that beat expectations, although revenue fell a bit short to mark a third straight quarterly topline miss.

Net income rose to $733 million, or $3.23 a share, from $527 million, or $2.32 a share, in the same period a year ago. Excluding nonrecurring items, adjusted earnings per share of $3.04 beat the FactSet consensus of $2.94.

Total revenue was down 1.6% to $3.02 billion, compared with the FactSet consensus of $3.01 billion.

For 2025, the outlook is for "modest volume growth," though the company expects lower vehicle production due to weaker sales and some inventory build.

The stock has tacked on 1.7% over the past three months, while Dow transports have gained 2.1% and the S&P 500 has advanced 3.5%.

-Tomi Kilgore

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January 29, 2025 17:47 ET (22:47 GMT)

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