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5/7/2024
BNSF Railway Co.’s first-quarter 2024 financial results included a few positives: Consumer products volume increased by a double-digit percentage, total traffic rose by an encouraging margin and operating expenses dropped. But that’s about it for the highlights.
The lowlights? Total revenue declined 6% to $5.7 billion; operating income fell 7% to $1.7 billion; net income tumbled 8% to $1.1 billion; and the operating ratio rose 1.1 points to 69.5% compared with Q1 2023 figures.
The revenue drop primarily was due to a 10% decrease in average revenue per car/unit, resulting from lower fuel surcharge revenue and an unfavorable business mix, BNSF officials said in a Q1 financial performance summary.
Consumer products revenue rose 6% to nearly $2 billion and volume soared 19% to about 1.3 million units on a year-over-year basis. Increased west coast imports, an intermodal customer gain and a boost in automotive volume from higher vehicle production drove the results, BNSF officials said.
Meanwhile, agricultural products revenue dipped 3% to $1.4 billion even though volume rose 3% to 311,000 units. Higher grain exports and fertilizer shipments partially offset lower domestic grain volumes, BNSF officials said.
But industrial products business was flat. Revenue declined less than 1% to nearly $1.4 billion and volume decreased by 1,000 units to 388,000. Lower mineral and aggregate shipments were mostly offset by higher volumes of petroleum products, plastics and taconite.
Coal revenue registered the worst results in Q1, plummeting 26% to $765 million. In addition, volume fell 21% to 293,000 units. Coal demand moderated because of lower natural gas prices, BNSF officials said.
The Class I also reported that total volume increased 7% to about 2.3 million units and operating expenses declined 5% to just under $4 billion versus Q1 2023 levels. The sale of BNSF Logistics LLC’s brokerage operations and lower average fuel prices, property taxes and other expenses helped rein in operating costs.