Burlington Northern Santa Fe
Burlington Northern Santa Fe Railway posted a third-quarter profit of $203 million, up from $192 million for the period ended Sept. 30 last year. The higher profit was attribtued to increased truckload shipments, increased agricultural shipments, and some rate increases.
Freight revenues for the third quarter increased $83 million to a record $2.37 billion compared with 2002 third-quarter revenues of $2.28 billion. Third-quarter freight revenues included increased fuel surcharges of $22 million compared with the prior year. Consumer Products revenues increased $48 million to a record $929 million, reflecting continued growth in the international, truckload and perishables sectors. Coal revenues decreased $24 million to $511 million
Operating expenses of $1.97 billion were $76 million, or 4 percent, higher than the same period in 2002. Increases in operating expense were primarily driven by a $45 million, or 21 percent, increase in fuel expense compared with the third quarter of 2002. BNSF's operating ratio was 81.8 percent compared to 81.6 percent for the same period in the prior year.
Canadian National Railway
Canadian National posted a net income for third-quarter 2003 of $294 million, an increase of $34 million over net income of $268 million in the comparable quarter of 2002 (all figures Canadian dollars). Improved results reflect increased intermodal revenue, recovery in Canadian grain shipments, solid cost control, and favorable tax adjustments of $30 million
Operating income for the quarter declined six per cent to $454 million. Revenues of $1,413 million were six per cent lower than the year-earlier period, reflecting the significant strengthening of the Canadian dollar, continued weakness in coal shipments and a slowdown in the automotive sector. Operating expenses declined six per cent to $959 million, due to the translation impact of the stronger Canadian dollar on U.S. dollar-denominated expenses, and lower expenses for purchased services and material, and equipment rents. Partly offsetting the decrease were higher casualty and other expenses.
The company's operating ratio for the quarter was 67.9 per cent compared with 67.8 per cent for the comparable quarter of 2002.
Net income for the first nine months of 2003 was $790 million compared with net income of $778 million for the same period of 2002.
Canadian Pacific Railway
Canadian Pacific Railway reported a 45 percent increase in net income to $95 million in the third quarter of 2003, compared with $65 million in the same period last year (all figures in Canadian dollars).
Total revenues were $904 million in the third quarter of 2003, compared with $917 million in third-quarter 2002. Without the impact of foreign exchange, freight revenue would have grown by 5 per cent.
Grain revenue increased $15 million, reflecting strong U.S. volumes and movement of a substantially larger Canadian crop. Intermodal revenue increased $6 million, driven by solid West Coast imports. Sulphur and fertilizer revenues were up $5 million, reflecting strong exports of sulphur and potash
Operating expenses were $696 million in the quarter, up marginally over the same period of 2002, including the beneficial impact of foreign exchange. CPR's operating income was $209 million, down 7 percent from the same quarter last year. Its operating ratio was 76.9 per cent, compared with 75.6 per cent in the same quarter of 2002.
CSX reported a net loss of $103 million compared with net income of $127 million a year earlier. The latest results included a $145 million charge from a change in the company's estimate for injury liabilities as well as a charge of $67 million for settlement of disputes related to the 1999 sale of the company's international container-shipping assets. Excluding these items, CSX said it earned $109 million compared with $127 million a year earlier.
Revenue fell to $1.88 billion from $2.06 billion a year earlier. Surface Transportation revenue, which includes CSX's rail and intermodal units, was $1.82 billion, up two percent from a year ago. Revenue and volume improved in all of the company's merchandise markets. Coal, auto and intermodal revenues were basically flat on a year-over-year basis. Total CSX revenues for the quarter were $1.88 billion versus $2.06 billion last year. The decline in Surface Transportation operating income essentially resulted from an overall lack of network fluidity, which drove increased equipment, employee, fuel and related service costs.
The railroad's third quarter 2003 operating ration balloned to 88.3 percent, up from 87.3 percent in third quarter of 2002.
Kansas City Southern
Kansas City Southern reported net income of $4.3 million for the third quarter of 2003, compared to net income of $10.6 million for the third quarter of 2002. Consolidated revenues for the third quarter of 2003 were $146.3 million, compared to $138.9 million for the comparable 2002 period, a 5 percen increase. Operating income more than doubled to $14.9 million compared to $6.2 million during the third quarter last year. Consolidated KCS results were negatively affected by lower earnings from Grupo Transportacion Ferroviaria Mexicana, S.A. de C.V. (Grupo TFM) and a reduction in other income.
KCS's equity earnings from Grupo TFM for the first nine months of 2003, decreased by approximately $21.4 million, in part caused by a period to period reduction of $18.4 million related to deferred tax benefits recorded by Grupo TFM. Also affecting the nine-month period was a $9.0 million decrease in Grupo TFM revenues and an $11.6 million increase in fuel costs.
KCS's third quarter operating ratio was 87.5 percent compared with 94.3 percent for the comparable 2002 period.
Norfolk Southern Corp. reported third-quarter net income of $137 million compared with net income of $126 million in the third quarter of 2002. Third-quarter railway operating revenues of $1.60 billion were even with third quarter 2002.
Intermodal revenues in 2003 set a third-quarter record at $315 million and also a record for the first nine months, increasing to $904 million compared to the same period a year earlier. Coal revenues improved slightly to $372 million. Third-quarter general merchandise revenues declined one percent to $911 million compared to the same period of 2002. Automotive revenues decreased 11 percent, primarily due to slowed manufacturing and model changeovers, while agricultural, paper and forest products and chemicals reported increases.
Operating expenses for the quarter remained unchanged at $1.29 billion compared to third quarter 2002. For the quarter, the railway operating ratio remained unchanged at 80.5 percent compared with the same period of 2002. For the first nine months, the operating ratio rose from 81.4 percent to 82.5 percent.
Union Pacific Corp.
Union Pacific said its third quarter earnings fell 27 percent and acknowledged congestion bottlenecks, primarily on the West Coast.
Profits dropped to $317 million in the 2003 third quarter compared to profits of $437 million in the 2002 third quarter. However, UP noted that 2002 third quarter profits were inflated by a major real estate sale and a large tax settlement. Fuel costs were up $50 million in the most recent quarter.
UP Chairman Dick Davidson told the Fort Worth Star Telegram that UP was too slow in replacing approximately 2,000 workers who retired or quit this year, leaving it short of train crews throughout parts of the system. The result was $15 million to $20 million in extra costs during the third quarter, Davidson said, primarily to pay extra for recalled train crews and also late charges to customers. He told the newspaper that UP planned to hire at least 1,000 train-crew workers by the end of this year and up to 2,000 more by the end of 2004.
For the third quarter, UP reported operating income of $592 million compared to $619 million for the same period in 2002. Revenue was a record $3.0 billion, up 4 percent versus 2002.
"As in the first half of the year, fuel prices continued to be a drain on earnings, adding nearly $50 million to third quarter expenses," said Davidson in news release. "On the plus side, however, we achieved record revenue of nearly $3 billion - a four percent increase over last year."
Overall, third quarter commodity revenue was up 4 percent with three groups - Agricultural, Industrial Products and Energy - all achieving best ever quarterly revenue. Results as follows: Agricultural up 10 percent; Industrial Products up 7 percent; Energy up 6 percent; Chemicals and Intermodal were flat; and Automotive down 3 percent.
Earnings for Union Pacific's trucking company, Overnite Corp., fell 67 percent to 6 cents a share, from 18 cents a share in the third quarter last year.
For its first nine months, Union Pacific had net income of $1.03 billion, a 7 percent increase from the $963 million for the same period a year ago.
The railroad's operating ratio increased to 80.0 percent, an increase over the third quarter of 2002 (78.3 percent). UP's year-to-date operating ratio was 82.0 percent, up from the first nine months of 2002 (79.7 percent).
© 2003 Brotherhood of Locomotive Engineers