BNSF Railway quarterly profit and revenue up, but capital budget gets trimmed

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FORT WORTH, Texas — BNSF Railway’s third quarter earnings improved amid higher traffic and average revenue per carload, but the railroad trimmed its capital expenses budget as volume growth lost momentum.

Traffic volume was up 6 percent — led by intermodal and automotive — while average revenue per carload was up 2.4 percent, BNSF said in a regulatory filing.

“Our overall volume growth moderated in the third quarter of 2017 compared to the growth experienced in the first half of the year and we expect continued moderation in the fourth quarter,” BNSF’s parent company, Berkshire Hathaway, said in a regulatory filing on Friday.

BNSF said it would reduce capital expenses by $100 million, to $3.3 billion, this year.

The railroad’s net profit rose 2 percent, to $1.04 billion, as revenue grew 3 percent, to $5.3 billion. Operating income was up 4 percent. BNSF’s operating ratio improved to 63.1 percent, down from 63.6 a year ago, despite the impact of Hurricane Harvey and the historic flooding that followed on the U.S. Gulf Coast.

Consumer products traffic, which includes intermodal and automotive, was up 7 percent in the quarter thanks to new services and higher market share, BNSF said.

Industrial products traffic was up 2 percent as frac sand shipments grew to support increased drilling and higher sand use per well.

Agricultural products traffic fell 12 percent in the quarter, largely due to lower grain exports.

Coal shipments increased 2 percent in the quarter as higher natural gas prices led to increased utility use of coal. But BNSF said this growth was offset by retirements of coal-fired power plants, increased use of renewable energy in electricity generation, and coal inventory adjustments at power plants.
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