U.S. railroad operator Norfolk Southern on Wednesday posted a quarterly profit that beat analysts' estimates, helped by cost cuts implemented to improve margins and better-than-expected insurance recoveries related to a costly derailment.

Shares of the company were up 4% in early morning trading.

Norfolk had taken a hit of about $1.4 billion in last two years due to a derailment in Eastern Ohio in 2023 that released over 1 million gallons of hazardous materials and pollutants near the state's border.

A Norfolk Southern train rests near the University of North Carolina's energy generation plant after it delivered coal to the facility in Chapel Hill, North Carolina, U.S. REUTERS/Jonathan Drake

Norfolk implemented voluntary and involuntary job cuts last year that helped offset some of that impact. Insurance recoveries related to the accident exceeded expenses by $43 million in the fourth quarter, Norfolk added.

The company reported operating revenue of $2.81 billion for the quarter ended Dec. 31, up 2% from a year earlier.

It reported an adjusted operating ratio of 64.9%, representing a 390-basis-point improvement from a year ago. The ratio is a keenly watched metric that indicates operating expenses as a percentage of revenue. A higher operating ratio reflects an increase in costs, suggesting lower profitability.

Norfolk reported a profit of $3.04 per share for the reported quarter, above analysts' estimates of $2.95 per share, according to data compiled by LSEG.

Total revenue fell 2% to $3 billion. Analysts, on average, expected revenue of $3.02 billion.