FORT WORTH, Texas — BNSF Railway boosted operating profits in the second quarter thanks to a combination of cost control and traffic volume gains.
The railway on Saturday, Aug. 3, said its operating income increased 1%, to $1.8 billion, as revenue declined 2%, to $5.7 billion. The operating ratio, at 68.2%, was flat compared to a year ago, as operating expenses declined by 3%.
But the quarterly earnings were negatively affected by cost accruals related to a $394 million federal court judgment against the railroad. The judgment was issued in June related to the operation of oil trains through land owned by the Swinomish Tribe of Washington State. BNSF has appealed the decision.
“Excluding the impact of litigation costs, our earnings and operating ratio showed solid improvement,” BNSF said.
Overall volume for the quarter increased 4%, with gains in consumer products and agricultural shipments more than offsetting declines in industrial products and coal.
Volume for consumer products, which includes intermodal and automotive business, was up 15%, primarily due to higher intermodal shipments from West Coast imports and volume from a new intermodal customer.
Agricultural products traffic grew 11% due to higher grain exports and shipments of renewable fuels and fertilizer.
Industrial products volume fell 1% due to lower aggregates, taconite, minerals, and waste shipments. Petroleum products and plastics shipments were up, however.
Coal volume slumped 29% for the quarter as utilities turned to lower cost natural gas for electricity generation.
