Rail carriers' second quarter income statements
Burlington Northern Santa Fe earned $249 million in the second quarter of 2000, down from earnings of $257 million in the 1999 second quarter. The nation's second-largest railroad had revenue of $2.24 billion, 2 percent higher than the $2.19 billion in the 1999 quarter.
For the first six months of 2000, BNSF earned an adjusted $492 million, or $1.14 a share, down slightly from $493 million, or $1.04 a share on more shares, in the comparable period last year.
Revenue increased 2 percent to $4.47 billion from $4.37 billion, while operating expenses of $3.44 billion also were 2 percent higher than the $3.37 billion of 1999. For the first half, the operating ratio improved slightly to 76.9 percent, compared with 77.1 percent a year earlier.
Canadian National reported net income of $230 million for the second quarter of 2000, an 18 per cent rise over year-earlier net income of $195 million.
CN's industry-leading operating ratio - the percentage of revenue required to operate and maintain the railroad - improved by 1.3 points in the quarter to a record 68.6 per cent.
CN's operating ratio for the six-month period improved by 2.9 points to 70.4 per cent. Revenue for the first six months of 2000 grew by five per cent to $2,705 million, with carloads rising by six per cent to 1,891 thousand.
Second-quarter earnings for CSX Corp. fell 43 percent as the owner of the third-largest U.S. railroad had higher costs from the division of Conrail.
Net income slid to $55 million. However, the results beat the estimates of several Wall Street financial analysts.
CSX has struggled with delays and congestion after it divided Conrail routes with Norfolk Southern Corp. in June of 1999. Service began to improve in May following the ouster of its top three rail executives.
The latest results include revenue from Conrail for three months, compared with one month last year. In last year's second quarter, a gain of $17 million for the sale of resort property led to net income of $114 million. For the first half of 2000, net income fell to $84 million. The gain of $17 million from the sale made first-half 1999 net income $140 million.
Canadian Pacific reported record second quarter operating income of $204 million, 29 percent higher than the operating income in the 1999 second quarter. Net income increased $22 million, or 30 percent, to $96 million.
Revenue increased $76 million, or 9 percent, to $904 million in the quarter, while operating expenses increased $29 million, or 4 percent, to $700 million. As a result, the ratio of operating expenses to income, a key bottom line indicator, improved to 77.4 percent, a 3.6 point decrease from a year earlier.
CP business in the U.S. Northeast continues to improve, particularly with Norfolk Southern since the break-up of Conrail between NS and CSX in 1999. The D&H unit has haulage agreements with NS that give the U.S. carrier access to New England and eastern Canada.
Union Pacific posted its eighth consecutive quarter of earnings improvement since 1997 as earnings increased 26 percent to $244 million. This compares with income of $194 million in the 1999 second quarter.
Operating income, excluding Overnite Transportation, reached $526 million, a 23 percent increase over 1999. The ratio of operating expenses to revenue in the second quarter, a benchmark of railroad performance, improved to 80.5 percent, 2.5 points better than the 83 percent of the 1999 second quarter, despite a 50 percent, or $90 million, increase in fuel prices over the year-earlier period. The operating ratio was the best since the 1996 acquisition of SP.
For the first six months of the year, UP earned $429 million and had operating income of $994 million, compared with earnings of $323 million and operating income of $803 million in the same 1999 period. The railroad's operating ratio improved 2.7 points in the first half to 81.7 percent from 84.4 percent.
Norfolk Southern's earnings rose 51 percent in the second quarter, the first time the company posted an increase in net income since it and CSX took over Conrail a year ago. The railroad earned $116 million in the three months ended June 30, beating the expectations of Wall Street analysts. It had net income of $77 million in the same quarter a year earlier. Railway operating revenues for the quarter were $1.58 billion, up 32 percent from $1.19 billion a year earlier. Railway operating expenses for the quarter grew 31 percent, from $996 million to $1.3 billion.
The quarter was the fourth full quarter in which NS operated its portion of Conrail lines. NS and CSX carved up Conrail's northeastern freight routes in a $10.3 billion takeover in June 1999. Since then, NS's earnings declined 87 percent in the third quarter of 1999, 81 percent in the fourth quarter and 88 percent in the first quarter of 2000.
Wisconsin Central Transportation's $7.8 million net income for the second quarter slightly exceeded analysts' estimates and was approximately equal to the second quarter of 1999. The Company's North American operating income for second quarter 2000 was $24.2 million compared to $25.1 million in the year-ago quarter. Second quarter 2000 North American operating revenues of $93.0 million set a quarterly record, up more than 2 percent from 1999 revenues of $90.8 million. The operating ratio (operating expenses as a percentage of operating revenues) was 73.9 percent versus 72.3 percent for the 1999 quarter.
Kansas City Southern Industries reported second quarter 2000 income of $8.8 million compared to $5.2 million in second quarter 1999; a diluted earnings per share improvement of 67 percent.
KCSI's consolidated second quarter 2000 revenues and operating expenses declined $4.3 million and $3 million, respectively, resulting in this decline in operating income.
For the six months ended June 30, 2000, income from continuing operations increased 50 percent to $19.2 million from $12.8 million for the six months ended June 30, 1999.