Norfolk Southern's third-quarter profit fell more than 13% as the railroad delivered fewer shipments and the results were weighed down by a one-time charge.
The railroad said Wednesday that it earned $569 million, or $2.22 per share. That is down from $657 million, or $2.49 per share, a year earlier. But excluding a one-time $99 million asset impairment charge, the railroad earned $2.51 per share.
The railroad's results beat Wall Street expectations. The seven analysts surveyed by Zacks Investment Research expected earnings of $2.36 per share.
Norfolk Southern said its revenue declined 12% to $2.51 billion, which was below the $2.53 billion that analysts predicted.
The railroad said it hauled 7% less freight during the quarter. That hurt its earnings, but it represents a significant improvement from the second quarter when volume was down 26% at the height of the virus-related shutdowns.
Norfolk Southern cut its operating expenses 10% to $1.67 billion during the quarter and if the one-time charge were excluded, expenses were down 15%.
The railroad is in the midst of changing its operations to run on a tighter schedule and move more freight with fewer people. Edward Jones analyst Jeff Windau said Norfolk Southern's results show it is making good progress on those changes because it significantly reduced costs even as it handled the large increase in volume during the quarter.
Norfolk Southern CEO Jim Squires said the railroad managed to reduce its employee headcount by 2% during the quarter even as it handled the surge in volume because of the changes it is making.
Norfolk Southern shares have increased nearly 5% since the beginning of the year, while the S&P 500 index has increased roughly 5%. The stock has risen 8.5% in the last 12 months.
The Norfolk, Virginia-based railroad operates about 19,500 miles (31,382.21 kilometers) of track in 22 states and the District of Columbia.