(The Associated Press circulated the following article on April 27.)
FORT WORTH, Texas — Burlington Northern Santa Fe Corp. said Tuesday its first-quarter earnings rose 3.2 percent on an 11.7 percent jump in revenue, and the railroad company raised its profit forecast for 2004.
The company said it earned $193 million, or 52 cents per share, in the January-March period, compared to $187 million, or 50 cents per share, a year earlier.
Analysts surveyed by Thomson First Call had expected profit of 46 cents per share.
The year-ago profit would have been 40 cents per share after an accounting change in the way railroads record asset-retirement costs.
Revenue rose to $2.49 billion from $2.23 billion.
Fort Worth-based Burlington Northern raised its outlook for 2004 earnings per share, saying they would grow 15 percent to 20 percent over the 2003 figure of $2.19 per share — or $2.53 to $2.62 per share. The company had previously forecast an increase of 10 percent to 15 percent, and analysts were expecting 2004 profit of $2.38 per share.
The railroad said 2004 freight revenue would rise 8 percent to 10 percent instead of the previous 4 percent to 7 percent forecast.
The company also predicted that earnings per share in the April-June period would rise 15 percent to 20 percent over the same time last year, when profit was 54 cents per share. Analysts are predicting 60 cents per share.
But its shares were down 40 cents to close at $32.41 on the New York Stock Exchange.
For the first three months of the year, Burlington Northern reported higher volumes of shipments for each major group in its business: consumer products, industrial products, coal and agricultural goods.
Officials said they expected shipments and revenue to keep growing in 2004 due to the improving economy, demand for Asian imports and coal, and grain being shipped to ports for export.
Chairman, president and chief executive Matthew K. Rose told analysts that rising demand was unusually broad across the railroad’s business, helped by a shortage in the rival trucking industry. The railroad was able to raise prices 2 percent and levy a fuel surcharge on 77 percent of its customers.
Company officials said they were not satisfied with their ability to turn increased revenue into profit. Expenses rose 10.3 percent to $2.08 billion.
The railroad said most of the extra costs were due to a 9 percent increase in miles of goods shipped and higher depreciation expenses.
Although the railroad levies a fuel surcharge on many customers, its fuel costs in the first quarter were nearly unchanged from a year earlier. That was partly because the company saved $33 million after taxes by hedging — typically, buying a long-term contract to guarantee a set price or limit for fuel.
The company bought about 2.6 million shares of its own stock during the quarter at an average price of $31.41 per share.
Burlington Northern operates one of the largest railroad networks in North America, with about 32,500 miles of track in 28 states and two Canadian provinces.