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Rail News: BNSF Railway
BNSF posts 37 percent gain in Q1 net income
BNSF Railway Co. reported first-quarter 2018 total revenue rose 8 percent to $5.6 billion from $5.2 billion a year ago as a result of a 5 percent increase in unit volume.
First-quarter net income net income soared 37 percent to $1.1 billion from $838 million a year ago, while operating income climbed 11 percent to $1.7 billion from $1.6 billion, BNSF reported in a Q1 financial performance summary.
Average revenue per car increased 2 percent as a result of higher fuel surcharges primarily driven by higher fuel prices and rates per car or unit, partially offset by changes in business mix.
Operating expenses in the quarter were up 8 percent compared with the same period in 2017. The increase was driven by higher volumes and inflation, including higher fuel prices. Fuel expenses jumped 27 percent in the quarter compared with last year.
BNSF posted a Q1 2018 operating ratio of 67.9 percent, down from 68.8 percent in Q1 2017.
Among Q1 volume highlights:
• Consumer products volumes were up 6 percent compared with the same period in 2017 due to higher domestic intermodal and international intermodal volumes.
• Industrial products volumes increased 9 percent compared with the same period in 2017, primarily due to increased sand and other products that support drilling and broad strengthening in the industrial sector which drove demand for steel, taconite, chemicals and plastics.
• Agricultural products volume increased 6 percent compared with the same period in 2017 due to stronger export and domestic grain shipments as well as higher ethanol and other grain products volumes.
• Coal volumes decreased 2 percent for the first quarter of 2018 compared with the same period in 2017, primarily due to plant retirements and partially offset by market share gains.
BNSF also reported that its capital commitments for 2018 will be $3.4 billion, which is $100 million higher than the Class I announced previously.
Like last year's capital expenditures plan, the plan's largest component calls for replacing and maintaining the railroad's core network and related assets. This year, the maintenance and replacement component is expected to be $2.4 billion, BNSF officials said.
The Class I anticipates spending $500 million on expansion and efficiency projects in the southern and northern Transcon routes; $400 million on freight cars and other equipment acquisitions; and $100 million to continue implementation of positive train control (PTC).
In 2017, BNSF completed PTC installation on all its federally mandated subdivisions and is now running hundreds of trains daily with PTC as it tests revenue service across the mandated territory, company officials said.
Contact Progressive Railroading editorial staff.