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Noting that Burlington Northern Santa Fe Corp.’s first-quarter earnings per share (EPS) were 29 cents better than he expected, Stifel Nicolaus & Co. analyst John Larkin yesterday raised his 2009 EPS estimate for BNSF to $5.09 from $4.80. Larkin maintained his 2010 estimate of $5.90 a share and introduced a 2011 estimate of $6.85 a share.

The annual estimates for the three years are driven by year-over-year volume changes of a decline of 11.2 percent this year, a 2 percent increase next year and a 1.7 percent increase in 2011, Larkin said in a research note. Unit revenue will fall 3.8 percent this year compared with 2008’s total, rise 5.9 percent in 2010 compared with 2009 unit revenue and increase 5 percent in 2011 compared with 2010’s total, he believes.

Larkin’s earnings estimates include operating ratios of 77.4, 76.2 and 75.1 in 2009, 2010 and 2011, respectively.

“As a point of reference, the company generated an operating ratio of 77.2 percent in 2008, a year when high fuel prices significantly hampered the operating ratio,” Larkin wrote.

Larkin maintained his hold rating on BNSF, adding that other North American railroads offer more “upside potential” in the next 12 months

“Our favorite names at current valuation levels include CSX and Norfolk Southern,” Larkin wrote.

— By Desiree J. Hanford. A Chicago-based free-lance writer, Hanford covered the equities market, including transportation, for Dow Jones & Co. for 10 years.