(Reuters distributed the following article on July 22.)
CHICAGO — Burlington Northern Santa Fe, the No. 2 U.S. railroad, on Tuesday said quarterly profit rose only slightly amid weak increases in volume as fuel costs edged higher.
The Fort Worth, Texas, company reported net income of $200 million, or 54 cents a share in the second quarter. A year earlier, the operator of 32,500 miles of track in 28 U.S. states and two provinces of Canada reported net income of $194 million, or 51 cents a share.
Wall Street had expected per-share profit of 48 cents to 55 cents, according to 13 analysts polled by Reuters Research, a unit of Reuters Group Plc. The average forecast was 52 cents a share.
A pickup in consumer product revenue and in coal revenue, a key category for North America’s largest railroads, helped total operating revenue rise to $2.29 billion in the quarter from $2.21 billion a year earlier.
Consumer Products revenue rose 7.4 percent to $911 million on growth in international, truckload and perishable sectors. Coal revenue rose 3.3 percent to $504 million largely on rate increases, the company said.
Fuel expense rose 27 percent in the quarter from a year earlier.
Like many other cargo haulers, railroads are closely tied to industrial customers and have weathered choppy economic conditions for several years. Several industry analysts have predicted the group’s profitability will surge when economic growth quickens.
Shares of Burlington Northern, which formed in 1996 in a merger, closed down 33 cents at $28.39 on the New York Stock Exchange (news – web sites) on Monday. During the year through Monday, Burlington Northern shares had risen 9 percent while the Dow Jones Railroads Index has risen 2.2 percent.