OMAHA, Neb. — BNSF Railway’s profits surged in the second quarter thanks to a combination of efficiency gains, lower costs, and higher coal volumes.
The railway’s pre-tax earnings increased 11.5%, to $1.8 billion, as revenue increased 0.15%, to $5.7 billion, corporate parent Berkshire Hathaway said on Saturday. Operating expenses declined 4.7% as fuel costs decreased 15.1%.
The railway’s operating ratio was 64.8%, a 3.4-point improvement compared to last year’s second quarter.
Overall volume for the quarter was up 1.4% but revenue per unit declined by 1.4% due to lower fuel surcharge revenue and unfavorable business mix, which was partially offset by pricing gains.
Revenue in the railway’s Consumer Products segment, which includes intermodal and automotive traffic, declined 7.1% despite a 0.6% increase in volume. “The volume increases were primarily due to higher intermodal shipments from higher West Coast imports and an
increase in automotive vehicle volume,” Berkshire said.
Industrial Products revenue declined just 0.8% despite a 3.6% drop in volume. The volume decline was largely due to lower construction and petroleum products shipments.
Agricultural and Energy Products revenue increased 3.5% on a 0.57% increase in volume. “The volume increases were primarily due to slightly higher grain exports, partially offset by lower domestic grain, feed and renewable fuel volumes,” Berkshire said.
Coal revenue grew 17.8% as volume rose 13.7% as higher natural gas prices made coal more competitive as a utility fuel.
