Oct 23 (Reuters) - U.S. railroad operator Norfolk

Southern ( NSC ) beat Wall Street estimates for third-quarter

profit on Thursday, aided by strong volumes in its merchandise

segment in its first earnings report since the merger

announcement aimed at creating the nation's first

transcontinental freight rail with Union Pacific ( UNP ).

"While not big in the third quarter, we started to see some

of the revenue erosion from competitor reactions to the merger

announcement," CEO Mark George said on an earnings call.

The deal, which drew a positive response from U.S. President

Donald Trump, is still subject to regulatory clearance from the

Surface Transportation Board.

Norfolk reported weaker quarterly volumes in its intermodal

and coal segments.

Trump's tariffs have resulted in a slowdown in freight and

softer consumer markets, affecting railroads.

Company executives flagged in the earnings call that coal

prices have remained pressured with significant uncertainty

around export trade, and that they expect utility demand to see

continued support from growing electricity consumption and lower

existing coal stockpiles.

Railroad operators' volumes of coal shipments have lagged

due to weak demand as consumers turn to cheaper natural gas for

energy.

Atlanta, Georgia-based Norfolk reported an adjusted profit

of $3.30 per share for the quarter, compared to analysts'

estimates of $3.19 per share, according to data compiled by

LSEG.

Its total operating revenue for the quarter rose 2% to $3.1

billion, which came roughly in line with analysts' expectations.

On an adjusted basis, the company's operating ratio - a key

metric for efficiency - was 63.3% for the quarter, a

10-basis-point improvement from the same period last year.

Earlier on Thursday, Union Pacific ( UNP ) topped Wall Street's

profit estimates on strong coal volumes. Last week, peer CSX

beat quarterly estimates on improving intermodal volumes and

higher pricing in its merchandise segment, offsetting lower coal

prices.