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Rail News: BNSF Railway

BNSF sets all-time quarterly revenue, income and earnings records

A diversified traffic mix, cost-control efforts and improved yields helped BNSF Railway Co. set revenue, income and earnings records in the third quarter.

Freight revenue increased 4 percent year over year to an all-time quarterly high of $3.95 billion primarily because agricultural products volume rose 8 percent. Ag products revenue totaled a quarterly record $682 million, up 10 percent compared with third-quarter 2006.

Coal revenue jumped 14 percent to $849 million, industrial products revenue rose 1 percent to $962 million — even though volume fell 2 percent — and consumer products revenue declined 3 percent to $1.46 billion primarily because of soft international container demand. Intermodal traffic decreased 10 percent to 1.3 million units compared with third-quarter 2006 traffic.

The railroad also reported all-time high quarterly earnings of $1.48 per diluted share compared with third-quarter 2006's $1.33 per diluted share. In addition, BNSF set a quarterly operating income record at $1 billion, which rose 9 percent year over year.

"Operating income exceeded $1 billion for the first time in our company's history despite continued economic softness in our consumer and industrial products business groups," said BNSF Chairman, President and Chief Executive Officer Matt Rose in a prepared statement.

The railroad's third-quarter operating ratio of 74.6 improved 1.3 points and operating expenses increased only slightly — less than 2 percent — to $3.1 billion compared with third-quarter 2006. A 4 percent drop in compensation and benefit expenses offset a 7 percent increase in fuel costs and 2 percent decrease in fuel surcharge revenue.

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