Burlington Northern Santa Fe
Burlington Northern Santa Fe earned $272 million, or 68 cents a share, in the third quarter, down from income of $325 million, or 70 cents a share, in the third quarter of 1999. The nation's second largest railroad was hit by sharply higher fuel prices and lower grain and coal shipments.
Revenue in the quarter was $2.32 billion, down 1% from $2.34 billion in 1999. Operating expenses increased $35 million to $1.74 billion in the quarter, 2% higher than the $1.71 billion expenses in the 1999 quarter. Diesel fuel expenses increased 36%, while other expense categories either were down or had small increases. Operating expenses also included $20 million of costs incurred in the now terminated effort to merge with Canadian National Railway.
Canadian National Railway Co. earned C$216 million (US$143 million) in the third quarter, up 9% from earnings of $199 million for the same quarter in 1999.
Revenue in the quarter rose 4% to US$880 million, and volume increased 4%. Operating expenses increased less than 2%, despite higher fuel costs. Operating income rose 9% to US$269 million, and the ratio of operating expense to revenue improved by 1.4 points to 69.4%, the lowest among major railroads in North America. Net income for the first three quarters of 2000 was US$463 million. In the comparable 1999 period, CN earned US$356 million. CN's operating ratio for the first nine months of the year improved to 70.1% from 72.5% for the comparable 1999 period.
Four of the five Canadian Pacific business units - Canadian Pacific Railway, CP Ships, PanCanadian Petroleum, Fording (mining) and Canadian Pacific Hotels and real estate activities - reported higher income in the quarter. Only Canadian Pacific Railway was down, although its operating performance was improved from the year earlier period.
Thanks to higher income primarily from its oil and gas subsidiary, CP earned C$466 million (US$308.6 million), or C$1.48 a share, in the third quarter. This is a huge increase compared to earnings of C$267 million, or C80 cents a share, in the third quarter of 1999.
Railroad net income of US$63 million was down from US$74 million a year earlier, when the company had a favorable, nonrecurring, tax adjustment. Revenue increased by US$24 million, or 4%, to US$566 million. For the first nine months of 2000, CPR earned US$183 million, up from US$161 million in the comparable 1999 period. Revenue increased to US1.7 billion from US$1.6 billion.
CSX Corp. reported net income of $427 million, or $2.02 a share, in the third quarter. In the comparable 1999 period, the company lost $113 million, or 54 cents a share.
Third quarter operating income at the company's CSX Transportation and CSX Intermodal units totaled $190 million, down 10.8% from $213 million a year earlier. Rail and intermodal revenue edged up to $1.79 billion from $1.77 billion, while expenses were $1.6 billion compared with $1.56 billion.
Although CSX hasn't achieved its goals in rail operations, the indexes are moving in the right direction following the difficult year following the Conrail acquisition, company executives said.
Average train speed in the third quarter reached 19.7 mph, up from 17.5 a year earlier, but short of the 20-mph goal. Average dwell time in terminals, a key measure of system fluidity, improved to 27.7 hours from 33.4 hours in the 1999 third quarter.
Norfolk Southern Corp.
Norfolk Southern Corp., struggling to overcome service problems stemming from its 1999 merger with part of Conrail, showed a small increase in profit from its railroad operations during the third quarter. NS reported a third quarter profit of $99 million, compared with $19 million in the same period of 1999.
But the results for the third quarter of this year included $46 million in after-tax income from the sale of timber rights. And the third quarter of 1999 included a non-cash charge of $31 million for a special work incentive program. Excluding those one-time items, NS earned $53 million in this year's third quarter and $50 million in the 1999 period.
Leading the revenue growth was intermodal traffic, which rose to an all-time high of $287 million, a 7 percent increase. Revenue from hauling coal, however, was down 2 percent, to $361 million. One of the bright spots for NS was a decline in its operating ratio, the percentage of revenue spent on running trains. It declined to 86.5 percent from last year's high of 90.3 percent. In past years, its operating ratio was in the mid-70s.
Union Pacific Corp.
Despite increased fuel prices, Union Pacific Corp. rode productivity improvements and revenue growth to increased third quarter net income of $256 million, up 4%.
The railroad's results edged the $.98 cents per share that was expected by financial analysts.
Net income in last year's third quarter was $245 million, or $.96 cents a share. Union Pacific hiked freight rates about 3% percent in early September to help offset rising fuel prices.
The railroad poured millions of dollars into implementing its merger with Southern Pacific as service problems crippled the railroad in 1997 and 1998. The railroad believes it has begun to experience the benefits of a merger that brought it to a total of 36,000 miles of track in 23 states from the Midwest to the West and Gulf coasts.
For the first nine months of this year, Union Pacific had net income of $685 million, a 21% improvement over the $568 million in the same period last year.
© 2000 Brotherhood of Locomotive Engineers