(The Associated Press distributed the following article on October 26.)
FORT WORTH, Texas — Burlington Northern Santa Fe Corp., the second-largest railroad in the United States, said Tuesday that a $288 million charge to reflect changes in the way the company estimates asbestos and enviromental liabilities drove third-quarter earnings down significantly from year-ago levels.
Quarterly earnings fell sharply to $2 million, or 1 cent per share, from $203 million, or 55 cents per share, a year ago. Excluding the 76-cent charge in the latest quarter, Burlington Northern posted earnings of 77 cents per share, on substantial unit volume increases.
Analysts surveyed by Thomson First Call were looking for the company to post earnings of 75 cents per share on sales of $2.76 billion.
Total revenue rose to $2.79 billion from $2.4 billion last year. Freight revenue increased 16 percent to $2.74 billion, driven by fuel surcharges and price increases. Consumer products revenue rose 18 percent to $1.10 billion as a result of double-digit increases in the international intermodal, truckload and perishables sectors.
Industrial products revenue increased 14 percent to $634 million, reflecting strong demand in the construction products, building products and petroleum products sectors.
The company said it is currently in talks with the staff of the Securities and Exchange Commission concerning the third-quarter accounting charge, but regardless of the outcome of these discussions, Burlington Northern doesn’t believe its operations or liquidity will be affected.