(The following article by David Koenig was circulated by the Associated Press on January 25.)
FORT WORTH, Texas — Profits surged at two of the nation’s largest railroads in the fourth quarter, as a growing economy increased demand to move everything from coal to consumer goods.
Burlington Northern Santa Fe Corp., the nation’s second largest railroad company, said Tuesday its fourth-quarter earnings rose 24 percent. CSX Corp., the largest rail operator in the eastern United States, said profits more than tripled from a year ago, a jump magnified by a year-ago loss from a business the company has since sold.
Demand was so strong that both companies were able to push rates up in the fourth quarter, allowing them to overcome the high cost of fueling their locomotives.
Burlington Northern’s chairman and chief executive, Matthew K. Rose, said the demand for rail freight service was unprecedented.
CSX Chief Executive Michael J. Ward called it “an economic environment that favors rail transportation.”
In afternoon trading, Burlington Northern shares rose $3.81, or 5.3 percent, to a 52-week high of $75.44 on the New York Stock Exchange. But CSX, which fell short of revenue forecasts despite its big jump in profit, saw its shares fall $1.05, or 2 percent, to $51.33.
“It was good numbers across the board,” said Tom Uutala, an analyst with Victory Capital Management in Cleveland. “All railroads have been going gangbusters lately.”
Burlington Northern, based in Fort Worth, reported profit of $430 million, or $1.13 per share, up from the year-ago quarter’s $347 million, or 91 cents per share.
For the October-December quarter, CSX earned $237 million, $1.03 per share, up from $66 million or 30 cents per share in the same period of 2004. The 2004 results were dragged down by a $93 million loss on an international terminals business that CSX later sold.
Revenue rose to a record $2.22 billion, up from $2.18 billion but below analysts’ $2.33 billion forecast.
Ward, the CEO, said the company’s expansion plans were on schedule.
For all of 2005, CSX earned $1.15 billion, $5.04 per share, up from $339 million or $1.52 per share in 2004. Revenue rose to $8.62 billion from $8.04 billion.