Carrier income, third quarter 2006
Burlington Northern Santa Fe
Burlington Northern Santa Fe Corporation reported record quarterly earnings of $1.33 per diluted share, a 22-percent increase over third-quarter 2005 earnings of $1.09 per diluted share.
Third-quarter 2006 freight revenues increased $597 million, or 19 percent, to an all-time quarterly record of $3.82 billion compared with $3.22 billion in the prior year. Revenue for the third quarter of 2006 included fuel surcharges of approximately $500 million compared with approximately $300 million in the third quarter of 2005. The increase in fuel surcharges was driven primarily by rising fuel prices, which was offset by the $293 million increase in fuel expense.
Coal revenues rose to $748 million, due to record loadings of Powder River Basin coal. BNSF exceeded second quarter 2006's record loadings by nearly 3 percent. Consumer Products revenues increased to $1.58 billion; Industrial Products revenues increased to $871 million; and Agricultural Products revenues increased to $621 million. All-time quarterly record operating income of $920 million increased by $142 million compared with the third quarter of 2005.
Canadian National Railway
CN reported its financial and operating results for the three-month and nine-month periods ended Sept. 30, 2006. Financial highlights include:
Third-quarter revenues increased nine percent due to rate increases, higher fuel surcharges, and volume growth, particularly in the grain, intermodal, and metals and minerals commodity groups.
Six of CN's seven commodity groups experienced revenue increases during the quarter, while revenue ton-miles - a measure of the rail freight volume carried by the company - rose by 6 percent.
Canadian Pacific Railway
Canadian Pacific Railway announced third-quarter net income of $162 million. Net income was lower in 2006 by $42 million when compared to the same period in 2005 due primarily to the impact of foreign exchange on long-term debt and a one-time special reduction to an accrual taken in third-quarter 2005. CP also boasted an improved operating ratio of 74.2 percent. Other financial highlights include:
In the third quarter, total freight revenues improved by 4 percent to $1,122 million, with growth in grain of 18 per cent; industrial and consumer products of 13 percent; sulphur and fertilizers of 10 percent; and intermodal of 8 percent. This growth more than offset a sharp decrease in coal revenues of 25 percent.
CSX Corp. said it boosted its third-quarter profit on demand to move freight by rail, higher prices, and special gains including an insurance payout to cover last summer's hurricane damage to its railroad network. The company said third-quarter net earnings doubled to $328 million up from $164 million a year ago. Results included a 17 cents a share gain from Hurricane Katrina insurance benefits and income tax resolutions. Excluding these items, CSX earned 54 cents a share. Revenue for the three months ended Sept. 29 rose 14% to $2.42 billion from $2.13 billion in the year-ago period.
CSX's net earnings benefited from a $15 million pre-tax gain from insurance recoveries from claims related to Hurricane Katrina. This gain brought total pay-outs for the first nine months of the year to $141 million. It expects to receive future insurance rewards "as more cash is collected." Also boosting reported results, CSX recognized an income tax benefit of $69 million mostly related to the resolution of 1994 to 1996 federal income tax audits. For the first nine months of 2006, CSX recognized $110 million of income tax benefits.
(With reporting from MarketWatch.com.)
Kansas City Southern
Shares of Kansas City Southern closed down more than 4 percent as the company reported mixed results. KCS reported lower earnings for its third quarter but higher revenues and higher freight volumes. The railroad reported net income of $26.4 million compared with $110.5 million during the same period last year. In the 2005 quarter, KCS had recorded a $131.9 million noncash gain from a tax settlement with Mexico related to the completion of its acquisition of Mexico's largest railroad, now called Kansas City Southern de Mexico.
Although the company beat by a dime per share Wall Street estimates of 22 cents a share, its shares closed at 28.39, down $1.19, or 4.02 percent. The company reported revenues of $415.7 million, an 8.1 percent increase from the $384.6 million in revenues in the third quarter a year ago. The company said the gain was driven by a 1.9 percent increase in freight volumes. The company said all of its business units but automotive saw increases in volume.
(With reporting from the Kansas City Star.)
Norfolk Southern Corporation reported record third-quarter net income of $416 million, a 38 percent increase compared with $301 million for the same period of 2005. Third-quarter income from railway operations increased 35 percent to a record $715 million.
For the first nine months, net income set a record at $1.1 billion, an increase of 19 percent compared with $919 million for the same period of 2005. Nine- month results for 2005 included a benefit of $96 million from the effects of Ohio tax legislation, which increased diluted earnings per share by $0.23. Excluding this item, net income for the first nine months of 2006 would have been 33 percent higher than the $823 million earned in the same period of 2005.
For the first nine months, railway operating revenues increased 13 percent to a record $7.1 billion compared with the same period of 2005. For the first nine months, the railway operating ratio improved 3.1 percentage points to 72.6 percent.
Union Pacific Corp.
Union Pacific Corp., the nation's largest railroad operator, said its third-quarter earnings rose 14 percent on brisk demand from shippers and more efficient operation of its rail system.
Its profit increased to $420 million, or $1.54 per share, in the July-September period from $369 million, or $1.38 per share, during the same period last year. The year-ago results benefited from a tax savings equal to 44 cents per share, but damage from the hurricanes that hit the Gulf Coast and Florida weighed down last year's results.
This year's results were helped by a $23 million insurance settlement from the January 2005 West Coast storms.
Revenue in the period grew 15 percent to $3.98 billion from $3.46 billion, driven by double-digit growth in most of the railroad's businesses. UP said carload volume grew 3 percent in the third quarter as the railroad neared its peak season, and at the same time, the railroad reduced the amount of time trains spend sitting in rail yards and other terminals by 7 percent, to 26.2 hours on average. That dwell time figure is a key measure of operating efficiency.
Strong demand has contributed to strong profits at Union Pacific this year, and the nation's largest railroad has been working to become more efficient and reliable. Through the first three quarters, Union Pacific's net income soared 54 percent over last year, to $1.12 billion on $11.62 billion in revenue.
Union Pacific has also benefited from better weather and fewer track problems this year. In 2005, the company was hurt by severe West Coast storms in January, derailments in Wyoming in May, hurricanes Katrina and Rita in August and September and flooding in Kansas in October.
The railroad said commodity revenue was again up from last year in all the major categories of its business. Agricultural revenue was up 19 percent, energy revenue was up 17 percent, industrial products revenue was up 15 percent, chemicals and intermodal revenue were both up 14 percent and automotive revenue was up 10 percent.
UP's operating ratio improved 5.0 points versus the third quarter 2005 to 81.1 percent.
© 2006 Brotherhood of Locomotive Engineers and Trainmen