(The Associated Press circulated the following article on October 7.)
FORT WORTH, Texas – Freight railroad Burlington Northern Santa Fe Corp. said Thursday it will take a $288 million after-tax charge against earnings for the third quarter to cover liability for asbestos and environmental problems.
Despite the non-cash charge, equal to 76 cents per share, to reflect changes in the way the company estimates its asbestos and environmental cleanup liabilities, Burlington Northern raised its outlook for third-quarter profit.
The company said it would earn between 75 cents and 77 cents per share, excluding the charge. Analysts surveyed by Thomson First Call had forecast profit of 70 cents per share.
Burlington Northern said the improved outlook was due to revenue growth and cost controls. The company said operating expenses would decrease in the fourth quarter, helping earnings by about 2 cents per share.
The company is scheduled to report July-September results on Oct. 26.
Chief financial officer Thomas N. Hund said the company just finished a review of its method of estimating asbestos and environmental liabilities after recent quarterly expenses came in. He said the company worked with actuaries to estimate clean-up costs.
The company said the charge covered environmental contamination that mostly occurred decades ago.
Burlington Northern scheduled a conference call Friday morning to discuss the issue with investors.
The company’s Burlington Northern and Santa Fe Railway Co. unit operates 32,500 miles of track in 28 states and two Canadian provinces.
Shares of Burlington Northern fell 34 cents, to $39.16, in trading on the New York Stock Exchange before the announcement. The shares were unchanged in extended-hours trading.