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5/10/2012



Rail News: BNSF Railway

BNSF increased revenue, income in Q1


In the first quarter, BNSF Railway Co. generated total operating revenue of about $5 billion, up 10 percent compared with first-quarter 2011, according to a U.S. Securities & Exchange Commission-filed 10-Q form and a performance summary that are posted on the Class I’s web site.

In addition, net income climbed 15 percent to $789 million, operating income rose 15 percent to $1.3 billion, volume increased 3 percent to 2.3 million units and the operating ratio improved 1 point to 74.4.

On a year-over-year basis, consumer products revenue rose from $1.3 billion to $1.5 billion, coal revenue inched up from $1.21 billion to $1.24 billion (even though coal volume declined 4 percent in the quarter), industrial products revenue increased from $914 million to $1.1 billion and agricultural products revenue remained relatively flat at $953 million versus $949 million.

Consumer products traffic increased 6 percent primarily because of higher domestic intermodal volume driven by highway conversions to rail, and higher automotive volume driven by increased North American auto sales and rebuilding vehicle inventories, BNSF officials wrote in the 10-Q form. Industrial products traffic increased 11 percent primarily due to increased shipments of petroleum products and construction products, principally sand and steel, they wrote. But agricultural products traffic decreased 5 percent because of weaker wheat exports, which partially were offset by higher U.S. corn shipments.

Operating expenses in the first quarter totaled $3.7 billion, up 9 percent compared with first-quarter 2011. Fuel costs — which shot up from $939 million in the year-ago period to $1.1 billion — accounted for the majority of the year-over-year increase, representing 30 percent of total operating expenses, BNSF officials wrote.

In addition, increased volume and inflation contributed to a 4 percent rise in compensation and benefits expenses, and higher locomotive maintenance costs helped drive up purchased services expenses by 4 percent, they wrote.


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