BNSF scores solid Q2 financial results

BNSF Railway Co.’s financial performance was promising in the second quarter, with total revenue up 26% to $5.8 billion, operating income up 28% to $2.2 billion and net income up 34% to $1.5 billion on a year-over-year basis.

In addition, total traffic jumped 24% to 2.6 million units and the railroad’s operating ratio improved 0.7 points to 60.4. The higher volume was partially offset by a 2% drop in average revenue per car/unit in 2021’s first half resulting from business mix changes, BNSF officials said in a Q2 performance summary posted on the Class Is’ website.

Performance in Q2 by commodity category shows:

• consumer products volume increased 27% primarily due to growth in both international and domestic intermodal shipments driven by increased retail sales and inventory replenishments by retailers, along with increased e-commerce activity;

• automotive shipments increased 13% despite continued production impacts from a global microchip shortage;

• agricultural products volume increased 13% primarily due to higher grain exports and increased ethanol and related commodities traffic; 

• industrial products volume increased 18% mostly due to continued recovery in the U.S. industrial economy driving higher volumes in the construction and building sectors; and

• coal traffic surged 32% primarily because of increased electricity generation, higher natural gas prices and rebuilding utility inventories.

However, the railroad’s Q2 operating expenses climbed 25% year over year to $3.6 billion. BNSF officials attribute the increase to higher volumes and higher average fuel prices somewhat offset by productivity improvements.

Compensation and benefits costs increased 17% to $1.2 billion, purchased services expenses jumped 23% to $686 million, fuel costs skyrocketed 112% to $693 million, and materials and other expenses climbed 20% to $271 million.

The per-gallon price of diesel increased 81% and 23% in Q2 and 2021’s first six months, respectively, compared with the same 2020 periods, BNSF officials said.