Rail carrier income reports: 1st quarter 2006

Burlington Northern Santa Fe

BNSF reported record first-quarter earnings of $1.09 per diluted share, a 31-percent increase over first-quarter 2005 earnings of $0.83 per diluted share. First-quarter 2006 freight revenues increased $470 million, or 16 percent, to a first-quarter record of $3.37 billion compared with $2.90 billion in the prior year. The 16-percent increase in revenue is attributable to growth in unit volumes, rates and fuel surcharges. Revenue for the first quarter of 2006 included fuel surcharges of approximately $350 million compared with approximately $170 million in the first quarter of 2005.

Highlights of the quarter include:

Canadian National Railway

On April 20, CN reported its financial and operating results for the three-month period ended March 31, 2006. First-quarter 2006 financial highlights:

Operating expenses for the quarter increased by four per cent to C$1,222 million, driven largely by a significant increase in fuel costs, as well as increased expenses for purchased services and material, and depreciation and amortization. These increases were partly offset by the favourable C$35-million translation impact of the stronger Canadian dollar on U.S. dollar-denominated operating expenses.

Canadian Pacific Railway

Canadian Pacific Railway said its first-quarter profits increased by 38 percent to $111 million. Earnings for the quarter ended March 31 amounted to 69 cents a diluted share, up from 50 cents on $80.7 million profit a year earlier. Before one-time items, profit totaled 74 cents per share. Highlights include:

Freight revenue in the quarter grew by double-digits in four of CPR's seven business lines, with grain leading the way at 28 per cent, industrial and consumer products up 13 per cent, and intermodal and automotive each growing 12 per cent. This more than offset the declines in coal and sulphur and fertilizer volumes.

CSX Transportation

CSX Corporation posted a sharp decline in first-quarter profit from year-ago results that included a gain on the sale of operations. Earnings declined to $245 million, or $1.06 per share, for the January-March period from $579 million, or $2.56 per share, a year ago. The year-earlier results included a gain of $425 million, or $1.88 per share, from the sdale of its international terminals business. Looking only at ongoing operations, per-share earnings surged 56 percent year over year, CSX said.

First quarter 2006 earnings were driven by stronger Surface Transportation results, which include the Company's rail and intermodal businesses.

First quarter highlights include:

Revenue rose to $2.33 billion from $2.11 billion in the prior-year period.

Kansas City Southern

Kansas City Southern posted better-than-expected quarterly profit on higher margins, improved service, fuel surcharges and rising prices, sending its shares up 10 percent. The company said it expects a "strong pricing environment in the United States and Mexico for the rest of the year" and substantial cost improvements from placing its Mexican unit on the same computer platform as the rest of its operations. The company took over full control of its Mexican unit, Kansas City Southern de Mexico SA, when it bought the 51 percent stake of Mexican logistics company Grupo TMM SA in April 2005. Quarterly highlights include:

Norfolk Southern

NS reported first-quarter net income of $305 million, or $0.72 per diluted share, an increase of 57 percent compared with $194 million, or $0.47 per diluted share, for the first quarter of 2005.

Railway operating revenues of $2.3 billion were the highest of any quarter in Norfolk Southern's history and improved 17 percent compared with $1.96 billion in the first quarter of 2005. Highlights include:

Coal revenues climbed $92 million, or 20 percent, to $559 million, compared with the same period last year, primarily a result of higher average revenues and a 4 percent increase in coal volumes.

Union Pacific

Union Pacific Corp. said first-quarter earnings more than doubled on record growth and improved efficiency.

The company reported quarterly net profit of $311 million, or $1.16 a share, compared with $128 million, or 49 cents a share, a year earlier.

The company reported revenue for the quarter of $3.7 billion compared with $3.2 billion a year earlier. The $3.7 billion represented the best first quarter earnings ever posted by the company.

Highlights for the quarter include:

"This quarter was positive for us in many ways," said Jim Young, president and chief executive officer. "We experienced record growth in our business, moved these volumes more efficiently and improved our bottom-line results. Most importantly, we provided better service to our customers."

Operating income in the first quarter of 2006 was $605 million compared to $313 million for the same period in 2005 ­ a 93 percent improvement.

First quarter 2006 commodity revenue was an all-time record of $3.5 billion, up 18 percent, compared to $3.0 billion in 2005. Drivers of the increase were a 4 percent increase in volumes as well as increased fuel surcharge revenue and yields.

First quarter 2006 average revenue per car was at an all-time best $1,481, versus $1,306 in the first quarter of 2005. The operating ratio improved to 83.7 percent in the first quarter of 2006 from 90.1 percent in the first quarter 2005.

The failroad's 2006 average quarterly fuel price of $1.87 per gallon compares to $1.45 per gallon paid a year ago.

The following revenue areas were up vs. the same quarter of 2005: Agricultural up 26 percent; automotive, industrial products and intermodal each up 23 percent; chemicals up 14 percent; and energy up 5 percent.



© 2006 Brotherhood of Locomotive Engineers and Trainmen