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Rail News Home BNSF Railway

10/24/2006



Rail News: BNSF Railway

BNSF sets revenue, income and volume records in third quarter



Similar to the Class Is that reported quarterly financial results last week, Burlington Northern Santa Fe Corp. set a few records in the third quarter. The railroad generated all-time-high revenue of $3.8 billion, earned a record $920 million in operating income, attained record quarterly earnings of $1.33 per diluted share and handled record volume of 2.8 million carloads — BNSF’s 18th-straight quarter of year-over-year volume increases.

Revenue, income, earnings and volume increased 19 percent, 18 percent, 22 percent and 7.4 percent, respectively, compared with third-quarter 2005 data. Quarterly coal revenue rose 20 percent to $748 million, consumer products revenue increased 18 percent to $1.6 billion, industrial products revenues went up 17 percent to $871 million and agricultural products rose 19 percent to $621 million.

However, third-quarter operating expenses of $3 billion increased 19 percent compared with similar 2005 data primarily because fuel costs rose 59 percent to $792 million, compensation and benefit expenses went up 8.2 percent to $975 million and purchased service costs increased 16 percent to $500 million.

In addition, BNSF’s third-quarter operating ratio worsened 0.1 points to 75.9. Excluding the impact of high fuel costs on revenue and expenses, the railroad’s ratio would have dropped to 72, said BNSF Chairman, President and Chief Executive Officer Matthew Rose during an earnings conference call held today in Fort Worth, Texas.

During 2006’s first nine months, BNSF’s revenue increased 17 percent to $11.1 billion, operating income rose 21 percent to $2.6 billion, net income went up 24 percent to $1.4 billion and operating ratio improved 0.7 points to 76.1. Operating expenses increased 16 percent to $8.5 billion primarily because of higher fuel and purchased service costs.

In the fourth quarter, BNSF execs expect both revenue and volume to rise 10 percent on a year-over-year basis.

“We continue to see strong demand in all sectors, excluding building starts,” said Rose.

— Jeff Stagl


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