BNSF profit lifted by strong pricing

Source: Supply Chain Digital

Date :29/04/2008 05:00:44

Burlington Northern Santa Fe Corp., the nation’s second largest railroad said Tuesday first quarter earnings were above analyst’ forecasts as strong pricing offset lower freight volumes.

The Fort Worth, Texas-based company reported first-quarter net income of $455 million, or $1.30 a share, up 30 percent from $349 million, or 96 cents a share, a year earlier.

Analysts, on average, expected earnings per share for the quarter of $1.23.

BNSF said that its improved results came despite an 11-cents-per-share "headwind" from higher fuel costs. The first quarter of 2007 was affected by a 14-cents-per-share charge related to environmental expenses and a technology system write-off.

Revenue rose to $4.26 billion from $3.65 billion a year earlier. Analysts expected $4.10 billion.

Freight revenue

BNSF said strong pricing offset lower freight volumes particularly in sectors hurt by softness in the U.S. economy.

Freight volumes were up in the company's coal, agricultural and industrial products divisions. But volumes at BNSF's consumer products division - which includes hauling consumer goods and automotive shipments - were down, due to economic softness related to the slowdown in the U.S. housing sector, the railroad said.

BNSF said it expects second-quarter freight revenue growth in the "mid-teens" despite flat freight volumes, plus EPS growth in the "high teens."

For the full year the railroad said it expects freight revenue growth in low double-digits and EPS approaching $6.00. Analysts have predicted full-year EPS of $5.91.

April 29, 2008