Burlington Northern 3Q Profit Jumps, Tops Views

By Beacon Staff

NEW YORK – Burlington Northern Santa Fe Corp. said Thursday its third-quarter earnings leaped 31 percent, on better yields and higher fuel surcharges.

The Fort Worth, Texas-based railroad earned $695 million, or $2 per share, up from $530 million, or $1.48 per share, in the prior-year period. The 2008 quarter included a tax settlement gain of 9 cents per share.

Revenue jumped 21 percent to $4.91 billion from $4.07 billion, a year earlier.

Thomson Reuters said analysts expected a profit of $1.69 per share on revenue of $4.8 billion.

The nation’s second largest railroad said improved efficiency, coupled with about $570 million in higher fuel surcharges, boosted results.

The company was also aided by fuel surcharges, which because of their two-month lag, allowed it to collect more in gas fees than it paid. Burlington Northern paid an average of $3.72 per gallon for diesel in the third quarter, compared with an average of $2.31 a gallon a year earlier.

Commodity segment growth also drove results in the quarter, Burlington Northern said. Agricultural products revenue rose 33 percent, mostly due to strong growth in shipments of ethanol, corn and feed. Coal revenue rose 23 percent for the quarter.

“While we are all concerned about the current financial and economic situation, we continue to be optimistic about the future of our diverse franchise and we remain confident about our long-term prospects,” President and Chief Executive Matthew Rose said in a statement.

For the fourth quarter, the company expects to report earnings between $1.70 and $1.80 per share, it said in a conference call. Analysts polled by Thomson Reuters, on average, expect $1.71 per share.

The nation’s second largest freight railroad also expects freight revenue growth of between 8 and 10 percent despite “slightly lower volumes.”

Shares of Burlington Northern fell 60 cents to $80.98 in aftermarket trading, after closing up 72 cents at $81.58 during the regular session.