(The following article by Dan Piller was posted on the Fort Worth Star-Telegram website on April 29.)
FORT WORTH, Texas — Burlington Northern Santa Fe Corp. of Fort Worth reported record first-quarter earnings of $321 million, or 83 cents per share, on strong shipment volumes of intermodal and agricultural products, coal and Asian imports through California ports.
BNSF earned $193 million, or 52 cents per share, a year ago. Sales rose 20 percent to $2.98 billion.
The increased traffic came as railroads have become more competitive with trucks, which have to contend with higher diesel prices and a driver shortage. BNSF Chief Executive Matt Rose was optimistic that the trend will continue.
“We’re more bullish for the rest of 2005,” said Rose, predicting 12 percent to 15 percent increases in shipment volumes and a 35 percent to 40 percent rise in earnings per share for the rest of this year.
Rose said that even if the U.S. economy cools during the rest of the year, the 30 percent increase in traffic from Asia through California ports will boost the carrier.
“There has been a fundamental shift in our traffic mix,” he said. He noted that heavier demand for imports, as well as utilities’ greater use of coal as natural gas prices rise, have made BNSF less dependent on automobile shipments than in the past.
Analyst Tom Wadowitz of Bear Stearns called the quarter “very impressive.”
BNSF avoided the troubles of rival Union Pacific Railroad, which has struggled in recent quarters because of shortages of crews and locomotives as it has tried to cope with the same record traffic volumes. Union Pacific reported a drop in first-quarter profit from $165 million last year to $128 million for the period that ended March 31. Both Union Pacific and BNSF serve the western United States.