MIAMI — According to a wire service, railway operator Burlington Northern Santa Fe Corp. on Tuesday said first-quarter profits rose, helped by cost-cutting even as weak shipping volumes hurt revenues.
The Fort Worth, Texas-based transport giant, the No. 2 U.S. railroad behind Union Pacific, said profits were 45 cents a share, or $172 million. A year earlier, Burlington had share profits of 34 cents before charges totaling 12 cents, or $140 million.
Wall Street had expected Burlington to report share profits between 44 cents and 48 cents, with a mean forecast of 46 cents, according to a survey of eight analysts by Thomson Financial/First Call.
Freight revenues declined 6 percent to $2.14 billion, hurt by declines in coal and agricultural shipments, according to executives and a company news release. Overall revenues were $2.16 billion, down from $2.19 billion.
“Earnings were impacted by softness in all major product sectors and the demand for coal was weakened because of mild winter weather,” Burlington Northern Chief Executive Matthew Rose said.
Burlington shares traded at $27.95 on Tuesday, down 25 cents. Railroad stocks such as Burlington in recent weeks have given up some gains driven by hopes of a rebound in the U.S. economy. Burlington is up about 7 percent over the last three months, well ahead of the less than 1 percent rise for the Dow Jones U.S. Total Market Index.
Coal shipments, a key business for the big private railroads left after industry consolidation of the 1990s, were off $18 million to $508 million. Coal loads had held up well through late 2001 but have slowed as electric plants have needed less fuel during a mild North American winter.
Consumer products revenues dipped 3 percent to $778 million largely because of fewer automotive shipments and reduced less-than-truckload traffic, Burlington said. Industrial products revenues fell $26 million to $491 million. Revenues for grains and other agricultural products dropped 13 percent.
Cheaper fuel in early 2001 helped trim operating expenses by $79 million, or 4 percent, to $1.8 billion. Burlington said its operating ratio, a measure of profitability, worsened 1.3 percentage points to 82.8 percent in early 2002 from early 2001.
Burlington executives said during a conference call that the overall tone of the U.S. economy in the second quarter was tepid and predicted declines in freight revenues of 3 percent to 5 percent and more cost cuts.
Earnings for the second quarter would be 45 cents to 50 cents a share, the executives said. Analysts surveyed by First Call before the earnings report had forecasts ranging from 48 cents to 52 cents for Burlington, which earned 50 cents in last year’s second quarter.
Burlington Northern also said it had repurchased 2.8 million of its shares, at an average price of $28.62 each, during January, February and March as part of a continuing buyback begun in 1997.