(Reuters circulated the following on June 18.)
NEW YORK — Burlington Northern Santa Fe Corp on Wednesday became the latest U.S. transport company to warn that earnings would miss forecasts because of severe flooding in the U.S. Midwest and rising fuel costs.
Burlington Northern, the No. 2 railroad in the United States, lowered its second-quarter profit outlook, citing flooded tracks and damaged infrastructure that cannot be repaired until the water recedes.
“In addition … fuel prices have continued to rise and are now significantly above the level assumed when BNSF provided second-quarter earnings guidance,” the company said in a filing with the U.S. Securities and Exchange Commission.
Burlington Northern said it expected a second-quarter profit of $1.30 per share compared with $1.20 per share a year ago. Analysts polled by Reuters Estimates had expected second-quarter profit of $1.39 per share.
The company’s outlook excludes charges from a jury verdict in Minnesota stemming from a 2003 crossing accident and possible costs from lawsuits in Montana concerning environmental cleanup.
In April, the railroad operator said it expected second-quarter earnings-per-share percentage growth in the “high teens.”
BNSF shares closed up 97 cents at $103.18 on the New York Stock Exchange, but slipped to $100.60 in extended trading.
UNION PACIFIC
On Tuesday, Union Pacific Corp., the No. 1 U.S. railroad, said that network outages and disruptions caused by severe weather would reduce its second-quarter earnings per share estimate by about $0.05 per share.
The company said the reduction would likely drive its second quarter earnings toward the bottom half of the $0.90 to $0.98 per share outlook range it provided in April.
Last week, Union Pacific enacted force majeure contract provisions to extend deadlines for cargo delivery, and declared an embargo across parts of its main line through Iowa because of the severe weather and record flooding.
The flood region encompasses Iowa, Illinois, Minnesota, Wisconsin, Missouri, Kansas and Indiana. The worst flooding in the U.S. Midwest in 15 years has damaged miles of tracks, washed out bridges, submerged crops, and caused the evacuation of thousands of people and farm animals.
On Wednesday, package delivery company FedEx Corp. forecast a weak fiscal 2009 because of fuel costs. FedEx said it expected full-year fiscal 2009 earnings of $4.75 to $5.25 per share.
July crude settled up $2.67 or 1.99 percent, at $135.71 a barrel on the New York Mercantile Exchange.