(Reuters) – Norfolk Southern Corp’s second-quarter profit tumbled 55% after the U.S. railroad operator recorded a fresh $416 million charge associated with the Eastern Ohio freight train derailment.
The derailment of one of its freight trains carrying hazardous materials in February led to a lawsuit by the U.S. Justice Department seeking to ensure that the company paid the full cost of the cleanup and any future long-term impact.
The company took a $387 million charge in the first quarter related to the derailment.
Meanwhile, Norfolk is also struggling with an industry-wide decline in freight volumes as consumer spending preferences shift to services from goods.
Union Pacific Corp said on Wednesday volumes fell 2% in the second quarter.
Norfolk, which has connections to every major container port on the Atlantic coast, as well as the Gulf of Mexico and Great Lakes, reported an adjusted profit of $2.95 per share, below analysts’ estimates of $3.11.
Revenue fell 8% to $3 billion and was slightly below estimates of $3.07 billion, according to Refinitiv data.
(Reporting by Ananta Agarwal and Amna Karimi in Bengaluru; Editing by Sriraj Kalluvila)
