BNSF posts Q1 revenue decline on lower volumes

BNSF Railway Co. yesterday reported first-quarter net income fell 5 percent to $1.19 billion, operating income rose 2.5 percent to $1.8 billion and total revenue declined 6 percent to $5.4 billion compared with first-quarter 2019's results.

The revenue decrease was primarily due to a 5 percent decrease in unit volume and a 1 percent decrease in average revenue per car/unit driven by an arbitration hearing recognized in Q1 2019, in addition to lower fuel surcharges, BNSF officials said in a Q1 performance summary.

BNSF also reported the following first-quarter volume trends:
• Consumer product volumes fell 7 percent compared with the year-ago period primarily because of lower international intermodal volumes as the COVID-19 pandemic contributed to lower U.S. West Coast imports. Volumes further decelerated late in the quarter in the domestic intermodal and automotive segments as the pandemic's impact on U.S. consumers intensified.
• Industrial product volumes fell 2 percent compared with Q1 2019. The results were attributed primarily to lower sand volumes driven by increased competition from in-basin sand and due to lower liquefied petroleum gas volume attributable to increased pipeline takeaway capacity. These decreases were partially offset by higher demand for petroleum products.
• Agricultural product volumes rose 3 percent versus Q1 2019's results, primarily due to higher domestic grain and soybean meal shipments, partially offset by lower grain exports.
• Coal volumes fell 8 percent compared to the year-ago quarter primarily as a result of low natural gas prices, mild winter weather and plant retirements.

Operating expenses during the quarter fell 10 percent to $3.59 billion primarily because of lower volume-related costs, productivity improvements and reduced costs related to improved weather conditions compared with first-quarter 2019.