Norfolk Southern is recovering some of the hefty costs from its derailment in East Palestine, Ohio, last year by collecting insurance payouts.
The Atlanta-based railroad collected $156 million from insurance payments in the second quarter of the year, which was $65 million higher than costs in the quarter from the wreck, according to its second quarter financial report.
The company has since the derailment recorded more than $1.6 billion in charges, including a $600 million settlement to resolve a consolidated class action lawsuit filed against the railroad after its fiery derailment of a train carrying hazardous materials on Feb. 3, 2023.
Norfolk Southern also in May agreed to a more than $310 settlement of federal investigations into the derailment.
The company reported some recovery in its quarterly financial performance compared with last year, when it was racking up significant charges from the Ohio derailment.
Railway operating revenues were $3.04 billion in the quarter ended June 30, up 2% from $2.98 billion a year ago.
Railway operating expenses were $1.9 billion, down 20% from $2.4 billion a year ago, when the company recorded a $416 million charge for the estimated cost of the East Palestine derailment.
As a result, Norfolk Southern’s second quarter net income this year was $737 million, more than double the $356 million it reported a year ago.
As it dealt with declining revenue and profits, Norfolk Southern earlier this year cut about 350 people from its management staff.
The railroad also recorded $50 million in costs for shareholder advisory matters in the first six months of this year, including $29 million in the second quarter. Norfolk Southern earlier this year faced an attempted takeover by an activist investor group, which drove the railroad to replace its chief operating officer and prompted shareholders to elect three new board members.
