Tuesday, November 24, 2009

Class I railroads post 12-month ROI of 8.42%

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Their success in sizing operations to demand helped Class I railroads maintain a relatively high return on investment (ROI) during the 12 months ended Sept. 30.

During a period that contained many of the worst months of the recession, the industry earned an average return of 8.42% on its net investment, compared with 9.88% in the 12 months ended Sept. 30, 2008, according to the Surface Transportation Board.

BNSF Railway earned an ROI of 9.27% during the latest 12-month period vs. 10.66% a year earlier. Union Pacific's respective returns were 7.88% and 9.62%.

In the East, Norfolk Southern experienced one of the biggest swings in ROI, dropping to 9.48% from 14.42%. CSX Transportation posted a return of 8.15% this year vs. 8.55% in the same period last year.

Kansas City Southern earned an ROI of 0.38% this year, down from 8.70%. Soo Line's return declined to 9.79% from 15.84%. CN/GrandTrunk's ROI dropped to 6.05% from 10.97%.

Industry-wide, total railway operating revenues in the 12 months ended Sept. 30, 2009, dropped sharply to $49.9 billion from the $58.4 billion reported a year earlier. Net railway operating income, on which ROI is based, dropped to $5.7 billion from $7.2 billion.