BNSF Railway reported stronger first-quarter profits as higher volume and more efficient operations improved the railroad’s bottom line.
Pre-tax income rose 13.5%, to $1.82 billion, as revenue increased 5%, to $5.92 billion, BNSF’s corporate parent, Berkshire Hathaway (NYSE: BRK-B), reported on Saturday morning. The railroad’s operating ratio improved 2.3 points to 65.6% as improved fuel efficiency and labor productivity more than offset higher fuel prices and wages.
Overall volume increased 2.2% thanks largely to growth in grain shipments.
Consumer products volume including intermodal and automotive increased 1.4% compared to a year ago, primarily due to growth in international intermodal traffic, Berkshire said.
Agricultural and energy volume increased 11.6% due to higher demand for grain, petroleum fuels, and oilseeds and meals.
Industrial products volume declined 0.6%, which Berkshire said was “due to lower shipments of plastics and building products, due to continued softness in the housing market.”
Coal volume declined 2.3%. “The volume decrease was primarily attributable to utility coal plant retirements, partially offset by increased demand from the impact of higher natural gas prices,” Berkshire said.
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