Through the third quarter of 2017, Berkshire Hathaway-owned Class I railroad BNSF posted an operating income of $5.3 billion, a $462 million (9 percent) increase over the first three quarters of 2016, according to the company’s latest financial statements.
Operating income for Burlington Northern Santa Fe (BNSF) railway during the third quarter of 2017 was $2.0 billion, an increase of $73 million (4 percent), compared to the same three months in 2016, according to the latest financial statements from the Berkshire Hathaway-owned Class I railroad.
Additionally, BNSF reported that for the first nine months of 2017, operating income grew 9 percent ($462 million) year-over-year to $5.3 billion.
Total revenues for the third quarter and first nine months of 2017 were up 3 percent and 8 percent, respectively, compared with the same periods in 2016, the railroad said, citing increases in unit volume among the reasons for the increases.
Unit volumes rose 3 percent year-over-year for the quarter and 6 percent for the first nine months of the year.
BNSF also pointed to higher average revenue per car/unit in the first nine months of 2017 as a driver in the earnings growth. The increase in average revenue per car/unit in the first three quarters, according to BNSF, was primarily due to higher fuel surcharges and increased rates per car/unit.
Also among the railroad’s third quarter and first three quarters of 2017 volume highlights were:
• Rises in consumer product volumes of 7 percent (third quarter) and 6 percent (first nine months) compared with the same periods in 2016, due to higher domestic intermodal, international intermodal and automotive volumes. The increases, BNSF said, were primarily due to improving economic conditions, normalizing of retail inventories, new services and higher market share.
• Increases in industrial products volumes of 2 percent for both the third quarter and the first nine months of 2017. The primary cause, BNSF said, was higher sand and other commodities that support drilling. In addition, strengthening in the industrial sector drove greater demand for steel and taconite, the railroad said. The volume increase was offset in part by lower petroleum products volume, the railroad said, due to pipeline displacement of U.S. crude rail traffic as well as lower aggregates and plastics volume.
• Agricultural product volumes were down 12 percent for the third quarter, but up 1 percent for the first nine months of 2017, compared with the same periods in 2016. The third quarter volume decrease, BNSF said, was driven by lower grain exports. The volume growth in the first nine months of 2017 was primarily due to higher shipments of domestic grain as well as ethanol and other grain products.
• Coal volumes rose 2 percent year-over-year in the third quarter and 12 percent for the first nine months of the year. BNSF cited the continued effects of higher natural gas prices, which led to increased utility coal usage, as the primary driver for the increase in coal shipments.