Quarterly earnings $1.33 per diluted share; 22% higher than 3/Q 2005
Burlington Northern Santa Fe Corporation (BNSF) reported record quarterly earnings of $1.33 per diluted share, a 22% increase over third-quarter 2005 earnings of $1.09 per diluted share.
“BNSF experienced double-digit revenue increases in each of the Company’s four business groups during the third quarter of 2006,” said Matthew K. Rose, BNSF Chairman, President and Chief Executive Officer. “We again handled record volumes in the quarter led by a 10% unit increase in coal, and an 8-percent unit increase in both our intermodal and agricultural products businesses. This led to our 18th consecutive quarter of year-over-year volume increases.”
Third-quarter 2006 freight revenues increased $597 million, or 19%, to an all-time quarterly record of $3.82 billion compared with $3.22 billion in the prior year. Revenue for the third quarter of 2006 included fuel surcharges of approximately $500 million compared with approximately $300 million in the third quarter of 2005. The increase in fuel surcharges was driven primarily by rising fuel prices, which was offset by the $293 million increase in fuel expense.
Coal revenues rose by $126 million, or 20%, to $748 million, due to record loadings of Powder River Basin coal. BNSF exceeded second quarter 2006’s record loadings by nearly three percent. Consumer Products revenues increased $244 million, or 18%, to $1.58 billion due to strong revenue increases in the international and domestic intermodal sectors. Industrial Products revenues increased $128 million, or 17%, to $871 million led by double-digit revenue growth in chemicals and plastics, petroleum and construction products. Agricultural Products revenues were up $99 million, or 19%, to $621 million, due primarily to strength in corn and soybeans.
Operating expenses for the third quarter of 2006 were $3.02 billion compared with third-quarter 2005 operating expenses of $2.54 billion. The $480 million increase in operating expenses was principally driven by a $293 million increase in fuel expense primarily reflecting higher prices and a declining hedge position as well as a seven percent increase in unit volumes.
All-time quarterly record operating income of $920 million, increased $142 million, or 18%, compared with the third quarter of 2005.