FORT WORTH, Texas — Freight railroad Burlington Northern Santa Fe Corp. lowered its outlook for third-quarter profits, citing increased expenses and revenue lost because of the work stoppage at West Coast ports, reports the Associated Press.
Burlington Northern said it expects to earn 50 cents to 52 cents per share in the quarter that ended Monday.
In July, the company said it expected to earn 54 cents to 58 cents per share in the third quarter. Analysts surveyed by Thomson First Call were forecasting earnings of 56 cents per share.
The company made the announcement after markets closed. In trading Tuesday, Burlington shares rose $1.43 to $25.35.
Burlington Northern cited several factors that added to expenses, including lower assumed return from its pension assets because of a weaker long-term outlook for financial markets.
The company said it would assume an 8.5 percent annual return on its pension assets instead of the previously assumed 9.5 percent return.
As a result, Burlington Northern said it would increase its non-cash, pretax pension expense by $11 million in the third quarter and $4 million in the fourth quarter.
The railroad company also said it incurred one-time labor-related costs of $4 million before taxes in the third quarter because of a deal announced in August to outsource computer services to IBM Corp.
The company said revenue was hurt by the West Coast port strike and weak grain exports.
Fort Worth-based Burlington Northern operates a rail network spanning 33,000 miles in 28 states and Canada.