Bloomberg News

Norfolk Southern Corp. (NSC - Get Report) beat Wall Street expectations with a stellar fourth-quarter earnings report, but it wasn't enough to prevent a beatdown of the commercial freight railway's stock Friday amid investor anxiety over the direction of the global economy.

Norfolk Southern's stock price slid 0.5% to $165.12 by the close of trading on Friday.

The hit came even as the railway giant reported fourth-quarter earnings of $2.57 per share, well over Zacks Consensus Estimate of $2.30. Fourth-quarter net income rose to $702 million. Norfolk Southern reported earnings of $2.6 billion, or $9.51 a share, for the full year.

Railway operating revenue jumped 9% to $2.9 billion, driven by higher rates, higher volume and higher fuel-surcharge income. Volume overall rose 3%, with growth by coal partly behind the increase, even as merchandise volume was flat.

In a statement, Norfolk Southern President and CEO James Squires touted the railway's decision, announced Thursday, to boost dividends paid to shareholders by 7.5% to 86 cents a share each quarter from 80 cents previously.

"Norfolk Southern's financial results in 2018 clearly demonstrate improved financial performance and our commitment to delivering shareholder value," said Squires. "Our confidence to deliver improved value to our shareholders ... is heightened by NS' momentum heading into 2019 and by an array of initiatives to serve customers better and operate more efficiently."

Still, Norfolk Southern and other railway companies saw a significant decline in their stock prices in December amid concerns over trade tensions between the United States and China and overall anxiety about the overall direction of the economy.

While freight volume has more than held up, signs of a potential slowdown in industrial production, such as the decline in new orders reported by the Institute for Supply Management's Purchasing Managers Index, are of particular concern given the nature of the railway's freight hauling business.