BNSF 1Q24: Revenue Down; OR Increases

(BNSF Photograph)

BNSF on May 6 released first-quarter 2024 financial results, including operating income of $1.720 billion, a 7% decline from the prior-year period’s $1.856 billion, and an operating ratio (OR) of 69.5%, a 1.1-percentage-point increase compared with 2023’s 68.4%.

Net income for the three-months ended March 31, 2024, was at $1.143 billion, down 8% from first-quarter 2023 ($1.247 billion).

BNSF’s total revenue for the quarter came in at $5.660 billion, down 6% from first-quarter 2023’s $6.019 billion, which the Class I attributed primarily “to a 10% decrease in average revenue per car/unit resulting from lower fuel surcharge revenue and unfavorable business mix, partially offset by a 7% increase in unit volume.”

According to BNSF, revenue changes for first-quarter 2024 also reflected the following:

• “Consumer Products volumes increased 19% in the first quarter of 2024 compared to 2023 primarily due to higher intermodal shipments resulting from increased west coast imports and the gain of an intermodal customer, along with an increase in automotive volume from higher vehicle production.
• “Agricultural Products volumes increased 4% in the first quarter of 2024 compared to 2023 primarily due to higher grain exports and fertilizer shipments, partially offset by lower volumes of domestic grains.
• “Industrial Products volumes decreased less than 1% in the first quarter of 2024 compared to 2023 primarily due to lower mineral and aggregate shipments, which was mostly offset by higher volumes of petroleum products, plastics, and taconite shipments.
• “Coal volumes decreased 21% in the first quarter of 2024 compared to 2023 primarily due to moderating demand as a result of lower natural gas prices.”

BNSF’s operating expenses for first-quarter 2024 came in at $3.940 billion, down 5% from the prior-year period’s $4.163 billion. The railroad attributed a “significant portion” of the decline due to the following factors:

• “Purchased services expense down 20% in the first quarter of 2024 compared to 2023, primarily due to lower purchased transportation driven by the sale of brokerage operations of BNSF Logistics, LLC and lower purchased services expense from MRL effective April 7, 2023.
• “Fuel expense decreased 11% in the first quarter of 2024 compared to 2023, primarily due to lower average fuel prices, partially offset by higher volumes. Locomotive fuel price per gallon decreased 14% in the first quarter of 2024 compared to the same period in 2023.
• “Materials and other expense decreased 21% in the first quarter of 2024 compared 2023, primarily due to lower property taxes, litigation costs, and other cost reductions across various spend categories.
• “Compensation and benefits expense increased 6% in the first quarter of 2024 compared to 2023, primarily due to wage inflation and the inclusion of MRL’s employee costs effective April 7, 2023, partially offset by improved employee productivity.
• “There were no significant changes in depreciation and amortization, equipment rents, or interest expense.”