Tuesday, November 06, 2012

BNSF surge beefs up Berkshire earnings

Written by  Luther S. Miller, Senior Consulting Editor

Omaha, Neb.-based Berkshire Hathaway, Inc. continues to reap handsome returns from its purchase of BNSF Railway. Berkshire late Monday announced that total third-quarter revenue grew 22% year-over-year to $41.1 billion, with a particularly strong performance from BNSF.

"The Railroad, Utilities and Energy segment's total revenue increased 7.5% year over year to $8.4 billion," reported Berkshire. "Of the total segment's revenue, approximately 63% came from Burlington Northern Santa Fe, the railroad company, which was acquired in February 2010. An increase in industrial and agricultural activity has automatically revived the demand for rail services and this translates into greater consumer demand for the segment. The trend is likely to continue in the coming years as well."

Warren Buffett's giant conglomerate reported third quarter 2012 operating earnings of $1.37 per share, missing the Zacks Consensus estimate by a penny. Earnings also compared favorably with $1.54 in the year-ago quarter.