FORT WORTH, Texas — Burlington Northern Santa Fe Corp., based in Fort Worth, said that the West Coast dock shutdown and slack agricultural shipments caused a 15 percent drop in third-quarter profit, the Fort Worth Star-Telegram reported.
The railroad company said it earned $192 million, or 51 cents per share, in the 2002 third quarter ended Sept. 20. In the same period last year, BNSF earned $225 million, or 58 cents per share.
Sales fell 1.5 percent to $2.31 billion from $2.34 billion.
The results were expected. BNSF had alerted investors this month that the West Coast dock shutdown would hurt earnings. BNSF’s earnings met the consensus of analysts’ forecasts by Thomson First Call.
BNSF Chairman Matthew Rose praised the railroad’s operations during the quarter, noting that “BNSF posted its fourth consecutive year-over-year quarterly record for one-time performance for our customers.” Rose described the current freight environment as “difficult.”
The biggest shipment segment decline was in agricultural products, which were off by $32 million, or 9 percent. The railroad said that lower demand for farm export products contributed to the reduced revenues. BNSF is a major shipper from the Midwest to ports in the Pacific Northwest and to the Gulf of Mexico.
Conversely, consumer product shipments rose by $27 million, or 3 percent, despite the shutdown at West Coast ports. Even so, the strike put a crimp in what has been steady growth of trailer-on-flatcar shipments of imported products.
“We are seeing ongoing inflation on the cost side without an offsetting increase in revenue,” said UBS Warburg analyst Rick Paterson, who rates Burlington Northern a “buy” and doesn’t own shares. The “one bright spot” was the company’s ability to generate higher revenue for each carload for the first time in seven quarters, he said.
BNSF operates a 33,000-mile rail network in 28 states and two Canadian provinces. This report contains material from Bloomberg News.