Norfolk Southern to pay $600M in Ohio derailment settlement

Norfolk Southern (NSC) announced on Tuesday that the company will pay $600 million to settle the East Palestine, Ohio train derailment lawsuit. The judge presiding over the case must give final approval before the settlement is resolved. Norfolk Southern still faces a Department of Justice suit accusing the company of violating the Clean Water Act.

Yahoo Finance Anchors Josh Lipton and Julie Hyman discuss the company's earnings and market reactions to the settlement.

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Editor's note: This article was written by Nicholas Jacobino

Video Transcript

JOSH LIPTON: Check out Norfolk Southern. They're going to pay $600 million to settle lawsuits stemming from that toxic train derailment in Ohio early last year. So they're to be the 600 million that settles the train derailment spilled all these toxic chemicals. Julie, remember companies saying this settlement resolves all class action claims emphasizes this is not an admission of liability.

Judge sounds like does still have to give final approval to the deal. Obviously, doesn't they'll resolve the DOJ's suit accusing the company of violating the Clean Water Act. The state of Ohio is also sued Norfolk, but at least one headline today. You did see shares get a lift on it.

JULIE HYMAN: Yeah, and by the way, the company also came out with preliminary earnings alongside the announcement of this settlement. And those earnings look like they were a little bit below what analysts had been anticipated. Profit $0.23 a share railway revenue of $3 billion.

If you exclude the costs of the settlement, it looks like earnings were $2.26 a share. So that might be limiting otherwise what might be some gains in the shares. The full earnings, by the way, are due later this month.

I'm seeing a preliminary date of about April 24. The stock if you look at it how it's done over the longer-term. And how it has done since the accident first happened here that goes back to February 3, 2023.

You can see the shares have kind of come full circle back to where they were. They're just about flat over the past year.

JOSH LIPTON: But the company also says to expect as much as $100 million impact on revenue due to port disruptions related to the collapse of the Francis Scott Key bridge in Baltimore as well.