BNSF posts lower Q4 revenue, income; sets 2024 capex at $3.9B

BNSF Railway Co. announced total revenue for fourth-quarter and full-year 2023 decreased 6% and 8%, respectively, compared with the same periods in the previous year.

The Q4 revenue decrease was due primarily to a 7% drop in average revenue per car/unit, partially offset by a 4% increase in volume. The decreases in average revenue per car/unit for both the Q4 and full year 2023 were primarily attributable to lower fuel surcharge revenue, partially offset by a favorable price and mix, BNSF officials said in a financial performance summary.

Operating income for Q4 and full-year 2023 was $1.9 billion and $7.4 billion, respectively, a decrease of $145 million (7%) and $1.2 billion (14%) compared to the same periods in 2022. BNSF posted operating ratios of 68.7% for Q4 and 68.4% for the full year compared with 67.8% and 65.9%, respectively.

BNSF reported revenue changes also resulted from the following:
• Consumer products volumes increased 7% and decreased 8% for Q4 and full year 2023, respectively. The full year decline was primarily due to lower West Coast imports, the loss of an intermodal customer and competition from lower spot rates in the trucking market that affected domestic intermodal demand, partially offset by an increase in automotive volume from higher vehicle production. The Q4 increase was due primarily to improved international and domestic intermodal volumes from increasing West Coast imports;
• Agricultural products volumes rose 1% and fell 3% for Q4 and full year 2023, respectively. The full-year drop was due mostly to lower grain exports, partially offset by higher volumes of domestic grain shipments. The Q4 increase was due mostly to increased demand and exports for ethanol and exports of non-soybean related grains; and
• Coal volumes fell 2% and 4% for Q4 and the full year 2023, respectively. The volume decreases were primarily due to moderating demand as a result of lower natural gas prices.

Meanwhile, BNSF announced its 2024 capital program will total $3.92 billion — the same as last year. The largest component of the 2024 capital program, $2.88 billion, will go toward maintaining BNSF's core network and related assets.

Maintenance projects in 2024 include replacing and upgrading rail, track infrastructure like ballast and rail ties, and maintaining rolling stock. Projects will consist of nearly 13,000 miles of track surfacing and/or undercutting work and the replacement of 365 miles of rail and approximately 2.8 million ties.