FORT WORTH, Texas — Reuters reported that Burlington Northern Santa Fe (BNI.N) on Tuesday matched Wall Street’s most optimistic earnings forecast as the No. 2 U.S. railroad posted a profit pickup in a soft U.S. economy.
The Fort Worth, Texas, railroad with lines crisscrossing the western United States said fourth-quarter profit was 54 cents a share, or $202 million, up from $177 million, or 46 cents a share, including extraordinary charges for layoffs in late 2001 equal to 11 cents a share.
Wall Street had expected Burlington to earn between 45 cents and 54 cents a share, with an average of 52 cents, according to 10 analysts surveyed by Thomson First Call.
Shares of Burlington Northern were up slightly.
Quarterly operating revenue was flat at $2.3 billion, the company said in a news release.
“Most of our bulk revenues … were off,” Chief Executive Matthew Rose said during a conference call.
Total freight revenue declined by $2 million to $2.27 billion, with all sectors but consumer products declining. Other revenues rose $2 million.
Revenue from coal, a key segment for big North American railroads, fell $6 million to $540 million. Agricultural shipment revenue, hurt by weaker exports, dropped from $415 million to $393 million. Industrial products revenue was off $1 million at $491 million.
Revenue from consumer product shipments rose 3 percent to $846 million from $819 million, helped by pickups in international and perishables loads.
Operating expenses benefited from job cuts in late 2001 and declined to $1.86 billion from $1.9 billion a year earlier. Burlington’s operating ratio, a measure of efficiency, declined to 80.8 percent from 82.4 percent.
“It was a respectable performance,” said transport analyst Jim Corridore of Standard & Poor’s. “There were not a lot of vectors in the environment working for the company.”
Executives predicted during the conference call that freight revenue was likely to rise modestly during early 2003 from early 2002, with expenses likely to increase slightly even without the effects of volatile fuel costs.
The executives also said first-quarter profit was likely to be in the “low 40s” cents per share.
Corridore, who owns no Burlington shares and whose firm does no investment banking business with the railroad, said the company’s target was in line with current forecasts. First Call has analysts predicting Burlington’s first-quarter profit between 42 cents and 44 cents.
For full-year 2003, analysts expect the company to earn between $2.12 and $2.30 a share, with an average forecast of $2.20. Burlington’s full-year 2002 profits was $2 a share, up from $1.87 in 2001.
Burlington said it had bought back about 3 million of its own shares during the fourth quarter at an average price of $25.76. The railroad’s shares have declined about 5 percent during the past six months, or slightly worse than the 4.5 percent drop in the Dow Jones Railroads index.
Burlington Northern shares rose 13 cents, or 0.49 percent, to $26.80 on the New York Stock Exchange.