Norfolk Southern (NSC) - Get Norfolk Southern Corporation Report climbed 2.9% to $207.50 Wednesday after the freight railroad operator beat Wall Street's first-quarter earnings and revenue expectations.

The Norfolk, Virginia-based company reported first-quarter income of $677 million, or $2.51 per share, up from $552 million or $1.93 a share, a year ago, and ahead of analysts' forecasts of $2.18 a share. 

Revenue increased 5% to $2.84 billion, ahead of Wall Street's estimate of $2.8 billion. Income from railway operations increased 16% year over year to $966 million. Continued workforce reductions helped drive expenses down 0.4%.

Railway operating expenses totaled $1.9 billion, down $8 million from a year ago as fuel price declines and lower compensation and benefits expenses were offset by increased purchased services and rents.

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Norfolk Southern said it plans to "test the limits of market-based pricing," while reducing expenses by running fewer, longer trains, shedding unproductive assets and having 500 fewer employees this year than last, executives said on a conference call with analysts, Reuters reported. 

"Our first-quarter results reflect the initial steps in the implementation of our new strategic plan that are transforming our company," James Squires, Norfolk Southern chairman, president and CEO, said in a statement. "We set company records for many financial measures in the first quarter, while improving our service product for our customers. We are intensely focused on the execution of the initiatives in our strategic plan that will drive shareholder value."