Norfolk Southern said a February derailment that released massive amounts of toxic chemicals in East Palestine, Ohio, cost the railroad $387 million. That dragged profit lower by about a third.
The Atlanta-based company reported it earned $466 million last quarter, down from the $703 million it earned in the same quarter a year earlier. Without the charge for the derailment, the railroad said income from rail operations would have totaled $1.1 billion in the quarter, comparable to a year ago.
Revenue at the railroad was up 7% to $3.1 billion.
A derailment on February 3 caused evacuations and massive clean-up efforts in East Palestine. The railroad said it has already committed $30.9 million in compensation and other support to the community. But that is a fraction of the money it continues to make.
Investors apparently viewed the costs associated with the derailment as a one-time cost. Shares were up 1% in premarket trading. But shares are still down 17% since before the derailment. Shares of two other major railroads, Union Pacific
(UNP) and CSX
(CSX), are also both still lower from before the derailment on concerns about legislation that would impose tougher regulation on freight railroads.