One of the largest freight railroads in the eastern United States, it hauls merchandise, coal, and intermodal containers and trailers across its network for agriculture, chemicals, automotive, and other shippers. It was created in 1982 when the Norfolk and Western and Southern railways combined into one holding company. The railroad brands itself "The Thoroughbred of Transportation," and its early marketing used real racehorses as mascots, including one named David.
Q2 2026 revenue rose 11% to $3,465M per MD&A, but reported table revenue was $2,998M, down 0.2% year over year
The story changed: reported Q2 was flat while the filing's own MD&A shows an 11% increase on fuel surcharges. Reported revenue was $2,998M, down 0.2% with of $2.43, down 26.6%, as prior-year Eastern Ohio recoveries did not recur. The company is operating under a suspended- merger agreement with results now split between reported and adjusted views.
Key takeaways
The MD&A reports railway operating revenues increased 11% to $3,465M in Q2 2026 on a 7% rise in average per unit from fuel surcharges and 4% volume growth, while the parsed financial table shows reported revenue of $2,998M, up 0.2% and 0.8% quarter over quarter.
Intermodal rose 22% per MD&A on a 16% increase in revenue per unit and 5% volume growth, with domestic volume up 11% from freight demand and tight truck capacity.
Coal rose 7% as export tonnage rose 25% on global thermal coal demand, offsetting a 15% decline in domestic metallurgical coal from idled facilities.
Section summaries
Management's Discussion and Analysis
Q2 2026 adjusted railway operating income rose 5% on 11% revenue growth driven by higher fuel surcharges and volume, partly offset by fuel and inflation costs.
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Railway operating revenues increased 11% to $3,465 million in Q2 2026, driven by higher average per unit (up 7%) from fuel surcharges and a 4% volume increase.
Adjusted railway operating expenses increased 15% to $2,269M, mainly from fuel expense up 85% on price and inflation, partially offset by lower headcount; rose 5%.
fell to $1.4B in H1 2026 from $2.0B a year earlier, driven by $322M in -related cash payments; share repurchases remained suspended under the Union Pacific merger agreement.
Reported was $547M, down 27.1% , and was $2.43, down 26.6%, with the Q1 2026 comparison showing the absence of $185M prior-year incident recoveries as the driver.
What changed
Q2 2026 coal per unit: Q1 2026 coal was down 2% on lower average revenue per unit; this filing shows coal revenue up 7% on export tonnage up 25%, reversing the prior decline trend.
cash payments: Q1 2026 carried $300M in incident cash payments; H1 2026 shows $322M in incident-related cash payments, confirming continued outflows as proceedings conclude.
Union Pacific merger: flagged in Q3 2025 and FY 2025 as pending STB approval with a $2.5B termination fee; this 10-Q restates prior risk factors unchanged and confirms buybacks suspended, with no new approval disclosure.
Share repurchases: halted after $248M in Q1 2025 and suspended under the merger; Q2 2026 reports no repurchases, consistent with the suspension.
Reported vs adjusted divergence: prior quarters reconciled Eastern Ohio as a net benefit; Q2 2026 MD&A leads with adjusted 11% growth while the table reports flat reported revenue, a wider gap than earlier filings showed.
What to watch
STB and regulatory approval of the Union Pacific merger and any $2.5B termination fee triggers disclosed next filing
Pace of cash payments after $322M in H1 2026 and any new liabilities from pending DOJ, Ohio, or NTSB proceedings
Q3 2026 reported versus adjusted alignment after the 11% MD&A figure versus $2,998M table gap
Resumption of share repurchases if the merger fails, against the $6.4B authorization
Intermodal surged 22% on a 16% rise in revenue per unit and 5% volume growth, with domestic volume up 11% due to freight demand and tight truck capacity.
Merchandise grew 8%, led by Chemicals (up 18%) on higher natural gas liquids and petroleum shipments, while Agriculture volume dipped 1% on lower corn.
Coal rose 7% as export tonnage jumped 25% on global thermal coal demand, offsetting a 15% decline in domestic metallurgical coal due to idled facilities.
Adjusted railway operating expenses increased 15% to $2,269 million, mainly from higher fuel costs (fuel expense up 85% on price) and inflation, partially offset by lower headcount.
fell to $1.4 billion in H1 2026 from $2.0 billion a year ago, driven by $322 million in Incident-related cash payments; share repurchases were suspended under the .
Quantitative and Qualitative Disclosures About Market Risk
The information required by this item is included in Part I, Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” under the heading “Financial Condition and Liquidity.”
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The information required by this item is included in Part I, Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” under the heading “Financial Condition and Liquidity.”
The risks set forth in “Risk Factors” included in our 2025 Form 10-K could have a material adverse effect on our financial position, results of operations, or liquidity in a particular year or quarter, and could cause those results to differ materially from those expressed or im…
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The risks set forth in “Risk Factors” included in our 2025 Form 10-K could have a material adverse effect on our financial position, results of operations, or liquidity in a particular year or quarter, and could cause those results to differ materially from those expressed or implied in our forward-looking statements. Those risks remain unchanged and are incorporated herein by reference.