Burlington Northern 3Q profit falls 30 percent

By SAMANTHA BOMKAMP

posted: 35 DAYS 4 HOURS AGO

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NEW YORK -The country's second-largest railroad, Burlington Northern Santa Fe Corp., said Thursday its third-quarter earnings dropped 30 percent because people still weren't buying more goods in stores and industrial production continued to sputter.

But much lower costs for fuel and labor kept the results from being a lot worse.

Burlington Northern Santa Fe earned $488 million, or $1.42 per share, compared with $695 million, or $1.99 per share at the same point last year. The results were well above Wall Street's expectations.

Revenue slipped 27 percent to $3.6 billion. The railroad, based in Fort Worth, Texas, said revenue from shipments of consumer products, which includes retail goods and cars, sank 36 percent. The other big decline was in the company's industrial production segment, where revenue fell 34 percent. That segment was hit by the continued falloff in demand for construction and building products.

But the company was able to offset some of the shortfall by cutting operating expenses 27 percent, through improving efficiency on its lines, employing fewer workers and benefiting from cheaper fuel.

Burlington's larger rival Union Pacific Corp. said earlier Thursday that its third-quarter earnings dropped by 26 percent, although it also cut costs to balance weak demand for freight.

2009-10-22 16:41:10