Norfolk Southern Corp. has announced a charge of $416 million in relation to the train derailment that occurred in East Palestine, Ohio. This brings the total costs associated with the incident to $803 million.
The $416 million charge comes after a previous $387 million charge related to the East Palestine derailment during the company's first fiscal quarter.
No casualties or injuries were reported during the derailment on February 3rd, but it was a major setback for Norfolk Southern and the rail industry as a whole. The incident involved 11 tank cars carrying hazardous materials, which subsequently ignited and caused fires that damaged an additional 12 railcars, according to the National Transportation Safety Board.
During a conference call to discuss the second-quarter results, Norfolk Southern CEO Alan Shaw stated, "Adversity reveals character and tests resolve. We continue to deliver on our commitment to make things right for the people of East Palestine and the surrounding communities."
In the second quarter, the carrier reported income of $576 million from its railway operations, including the $416 million charge associated with the East Palestine incident. This represents a 55% decline compared to the same period last year when the income was $1.3 billion.
Despite this setback, shares of Norfolk Southern experienced a slight increase of 0.2% on Thursday, while the S&P 500 index saw a gain of 0.5%. However, the company's stock has fallen 3.7% in 2023.
The East Palestine derailment has led to legal action against Norfolk Southern, as they have been sued by both the Justice Department and the EPA. The company is committed to addressing the situation and has enlisted Atkins Nuclear Secured to lead a safety review.
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