Burlington Northern Santa Fe

On January 22, Burlington Northern Santa Fe Corp. said its fourth-quarter profits -- before unusual -- items fell to $472 million.

The Fort Worth, Texas-based transport giant, the No. 2 U.S. railroad behind Union Pacific, said net profits fell to 46 cents per-share from 65 cents per-share a year earlier.

Excluding unusual items, including a $42 million after-tax charge for workforce reduction related costs, earnings were 57 cents a share in the latest period. Freight revenues for the 2001 fourth quarter were $2.27 billion, 2 percent lower on over 3 percent higher ton-miles compared with the same 2000 period.

Revenues fell to $2.3 billion from $2.34 billion a year earlier, in part because of the loss of a major transport contract with giant automaker General Motors.

BNSF's earnings per share for the full year ended December 31, 2001, including unusual items, was $1.87 on a diluted basis compared with earnings of $2.36 per diluted share in 2000. Operating expenses of $7.39 billion for full-year 2001 increased by $330 million or 5 percent on 2 percent higher ton-miles. Full-year operating income fell to $1.79 billion from $2.15 billion in 2000.

Canadian National Railway

Canadian National Railway Co. paid little heed to the recession in the fourth quarter of 2001, posting a 25% increase in profit over the same quarter one year ago.

While the railway's earnings were inflated by the acquisition of the Wisconsin Central Transportation Corp., it also managed to control costs while finding 10% more revenue.

In the quarter, CN reported net income of C$296-million ($1.48 a share), compared with C$237-million ($1.20) a year earlier. Revenue rose to C$1.54 billion from C$1.39 billion. Of that, the acquisition of WC, effective on Oct. 9, contributed net income of C$17 million (8) and C$129-million of additional revenue.

The company's operating ratio, a measure of efficiency based on the percentage of revenue needed to run the railway, improved by 2.2 points in the quarter to an industry leading 66.1%.

For the year, CN had income of C$978 million on an adjusted basis. That's up from C$879 million a year earlier. Excluding one-time items, CN had income of C$1.04 billion ($5.23), up from C$937 million ($4.67) in 2000. Revenue was C$5.65 billion, up from C$5.43-billion.

Candian Pacific Railway

Canadian Pacific Railway expects a "tough first half" because of the economic downturn and possible drought conditions for grain crops in Western Canada, company executives told a news wire service on January 22.

The firm released fourth-quarter financial results on January 21. Profits, excluding nonrecurring items, fell 5 percent to C$118 million ($73.3 million), or 74 Canadian cents per share. In the final quarter of 2000, it earned C$124 million, or 78 Canadian cents a share.

A severe drought in 2001 in southeastern Alberta and southwestern Saskatchewan drastically reduced CP's grain shipments. While it is early in the year, a mild winter and the resulting lack of snow are again raising concerns about moisture levels in Western Canada.

As part of a cost-cutting operation in 2002, CP expects to abandon about 300 miles of under-used lines and to pare an undisclosed number of jobs. After cutting more than 1,300 staff last year, CP employs about 16,900.

CP will spend between C$10 million and C$12 million on cleanup of a Jan. 18 derailment of 31 ammonia cars at Minot, N.D. Total costs will depend on any lawsuits, but CP has an insurance policy that kicks in after C$7 million.

CSX Transportation

CSX Corp., the parent company of CSX Transportation, reported on January 23 a fourth-quarter 2001 profit of $65 million, or 31 cents per share, up from $54 million, or 26 cents per share, the previous year.

CSXT operates the third-largest railroad in the United States. The latest three-month period was the seventh consecutive quarter CSXT has reported earnings exceeding the previous year's earnings.

Despite the recession, surface transportation, which includes the rail and intermodal units, had its strongest earnings since the first quarter of 1999. Operating income was $246 million, excluding the litigation provision, up from $205 million in the fourth quarter of 2000.

The recession and the slowdown in business following the events of Sept. 11 drove down chemicals, autos, metals, paper, minerals and intermodal revenue for the quarter, but coal remained solid.

For 2001, CSX net income from continuing operations was $293 million, or $1.38 per share, compared to $186 million, or 88 cents per share, for 2000. Excluding the litigation provision, net income from continuing operations was $330 million or $1.55 per share, an increase of 77 percent.

Kansas City Southern

Kansas City Southern Industries Inc. said on January 31 that fourth-quarter profits more than doubled, helped by a surge in domestic coal shipments.

The railroad reported net income of $11.1 million, or 18 cents share, compared with $3.6 million, or 6 cents, a year earlier. Revenues increased 8 percent, to $145.5 million from $134.8 million. KCS said its net tons of coal shipped increased about 35 percent from third-quarter levels because of strong demand from utility plants.

It also said shipments rose for paper products, export grain, certain chemical and plastics products and military shipments. These were partially offset by declines for domestic grain, food products, ore and mineral products, steel and scrap metal shipments and intermodal products, mostly due to the slow economy.

Kansas City Southern said it expects coal revenues to decline in 2002 as the result of a contractual rate reduction at one customer and the expiration of another contract.

KCS said its equity earnings from its railroad in Mexico, Grupo TFM, tentatively increased $2.2 million and interest expense declined $1.7 million. It said those improvements were partly offset by a $9.8 million increase in the income tax provision.

Norfolk Southern Corp.

Norfolk Southern Corp. said on January 23 that cost control measures helped its fourth-quarter and yearly earnings beat Wall Street expectations despite the slow economy.

The holding company, which owns the Norfolk Southern Railroad, earned $115 million, or 30 cents per share, in the three months ended Dec. 31, including an after-tax gain of $12 million, or 3 cents per share, from the sale of a real estate parcel.

That compared with earnings in the fourth quarter of 2000 of $5 million, or 1 cent per share, when the company took a work force reduction charge of $39 million, or 10 cents per share.

Revenues grew slightly to $1.53 billion, compared with $1.52 billion in the fourth quarter of 2000, despite a 1 percent, or 20,600-unit, decrease in carloads.

Annual profits rose to $375 million, or 97 cents per share, including an after-tax gain of $13 million, or 3 cents per share, related to the 1998 sale of Norfolk Southern's former motor carrier subsidiary, North American Van Lines Inc. In 2000, the company earned $172 million, or 45 cents per share, including a work force reduction charge of $101 million, or 26 cents per share.

Union Pacific Corp.

Union Pacific Corp., North America's biggest railroad operator, said on January 24 that fourth-quarter profits shot up 20 percent amid a strong pickup in coal shipments.

The firm, which also owns a trucking operation, said that quarterly net income was $275 million, or $1.06 share, up from $229 million, or 90 cents. The 2000 fourth quarter figures excluded a $72 million charge for job cuts.

Operating revenues rose 2 percent to $3 billion from $2.95 billion.

Energy-related revenues, mainly for carrying coal, were up 13 percent from the same three months ended Dec. 31, 2000. Agricultural shipments, including a jump in grain shipments to Mexico, rose 8 percent, according to spokesman John Bromley.

Consumer-related revenues, such as industrial products, chemicals and automotive, dropped. Intermodal business, involving shipments carried on both rail and other transport forms, such as trucks, rose 1 percent.

Results were helped by a 10 percent rise in worker productivity and a 20 percent drop in fuel and utilities costs, Union Pacific said.

For all of 2001, net income rose 6 percent to $966 million, or $3.77 a share. For all of 2000, profits were $914 million, or $3.61 a share, before the after-tax charge for staff cuts.

Union Pacific, which has ridden a broad rally in rail stocks fueled by hopes of a up swing in the U.S. economy, is up 12 percent over the last 12 months.


2002 Brotherhood of Locomotive Engineers