Atlanta-based Norfolk Southern reported a precipitous decline in first quarter profit, tallying hundreds of million of dollars of expenses in the fallout of its fiery derailment of a train carrying hazardous materials in East Palestine, Ohio, more than a year ago.

The company recorded $592 million in expenses in the first quarter related to the East Palestine derailment.

That’s after Norfolk Southern had already tallied $1.1 billion in charges for its response by January.

Earlier this month, Norfolk Southern announced a $600 million settlement agreement to resolve a consolidated class action lawsuit filed against the railroad after the East Palestine derailment. The $592 million expense includes the benefit of $108 million in insurance recoveries as well as other cleanup costs.

Norfolk Southern said the settlement of the class action lawsuit “does not include or constitute any admission of liability, wrongdoing or fault.”

Norfolk Southern Chief Financial Officer Mark George said during an investor conference call Wednesday that the settlement “addresses the most significant remaining legal exposures for our shareholders.”

On Wednesday, the company reported $53 million in quarterly net income, down from $466 million in the first quarter of 2023.

The company saw its railway operating revenues decline to $3 billion in the first quarter, down 4% from a year earlier. Its railway operating expenses increased about 17% compared to a year ago to nearly $2.8 billion.

The railroad said it is seeing pressure on its coal business and exports due to the Baltimore bridge collapse and port closure, resulting in a $25 million to $35 million revenue impact per month.

In late January, the company said it would cut 300 people from its management staff over the following several months to reduce costs.

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