Jan 29 (Reuters) - Norfolk Southern NSC.N reported a rise in fourth-quarter profit on Thursday on cost controls amid uneven freight demand and persistent macroeconomic strain.

The results come after the U.S. Surface Transportation Board earlier this month sent back Union Pacific's UNP.N proposed $85 billion merger with the company for revision.

The Surface Transportation Board deemed the December merger filing incomplete, but Union Pacific CEO Jim Vena said the request is routine and the deal is still on track for a close in the first half of 2027.

In October, Norfolk said it expected future top-line fluctuations from "competitor response" to the proposed merger, which already drove a 2% drop in third-quarter intermodal volumes. Intermodal shipping involves two or more means of transportation for goods.

In the fourth quarter, Norfolk saved more than $215 million, led by productivity gains, CEO Mark George said in the company's earnings statement on Thursday.

"As we move through 2026, the demand environment remains unclear," he added.

Railway operating revenue for the fourth quarter fell 2% to $3 billion from a year earlier. Railway volumes dropped 4% from a year ago.

Atlanta, Georgia-based Norfolk reported an adjusted profit of $3.22 per share for the quarter, compared with $3.04 per share a year earlier.

On an adjusted basis, the company's operating ratio - a key measure of efficiency - was 65.3% for the quarter, a 40-basis-point deterioration from a year earlier.

(Reporting by Apratim Sarkar; Editing by Maju Samuel)

((Apratim.Sarkar@thomsonreuters.com;))