BNSF, the nation's second-largest railroad operator, said Jan 21 that it expects the economy to continue to gradually improve this year as it reported a smaller-than-expected drop in fourth-quarter earnings, reports the Associated Press.
The company, which is being purchased by billionaire investor Warren Buffett's Berkshire Hathaway, said profit slipped 13 percent to $536 million, or $1.55 per share, from $615 million, or $1.78 per share, in the 2008 period. Excluding a 25-cent-per-share tax benefit, Burlington Northern earned $1.30 per share in the latest quarter.
Revenue fell to $3.68 billion from $4.37 billion a year earlier, with the biggest declines seen in shipments of industrial products, which fell 22 percent. Shipments of consumer products, hard hit by a downturn in spending, slid 20 percent while revenue from coal declined 17 percent.
Industrial product demand has fallen off because of the continued slump in housing and construction industries. Demand for coal, used to make electricity and steel, has dropped as industrial production slowed, plants closed and more consumers conserved energy to save money.
BNSF said revenue also was hurt by lower fuel surcharges, which are determined by the price of diesel. However, the company was able to partially offset drops in shipping by improving productivity.
BNSF expects to spend about $2.1 billion for track, signal systems, structures and freight cars, as well as technological upgrades such as those required after the California commuter rail-Union Pacific crash.
The railroad, based in Fort Worth, Texas, will become part of Berkshire Hathaway pending shareholder approval of the $26.2 billion deal in February. The major hauler of grain, coal and consumer products operates 32,000 miles of track in 28 states and two Canadian provinces.
(The preceding article was published by the Associated Press.)
