BNSF Posts 26% Revenue Boost in 2Q21
Written by Marybeth Luczak, Executive Editor
BNSF volumes rose 27% in second-quarter 2021, “primarily due to growth in both international and domestic intermodal shipments driven by increased retail sales and inventory replenishments by retailers along with increased e-commerce activity,” the railroad noted in its Aug. 9 earnings report. Automotive shipments, the railroad said, “increased despite continued production impacts from a global microchip shortage.”
For second-quarter 2021, BNSF revenue came in at $5.809 billion, up 26% from the prior-year period, reflecting a 24% increase in volumes, led by Consumer products, the Class I railroad reported.
The revenue increase included volumes of 2.624 million units, “partially offset by a 2% year-to-date decrease in average revenue per car/unit resulting from business mix changes,” according BNSF, which released its second-quarter 2021 earnings statement on Aug. 9.
Operating income for the three months ending June 30, 2021 was $2.2 billion, up $488 million or 28% compared with the same period last year. The operating ratio was 60.4% vs. 61.1% in 2020.
Other second-quarter 2021 highlights:
• On the Consumer Products side, operating revenues were $2.083 billion, up 33% over the same period last year. Volumes rose 27%, “primarily due to growth in both international and domestic intermodal shipments driven by increased retail sales and inventory replenishments by retailers along with increased e-commerce activity,” BNSF reported. Automotive shipments “increased despite continued production impacts from a global microchip shortage.”
• For Agricultural Products, operating revenues were $1.272 billion, a 19% boost over second-quarter 2021. Volumes increased 13%, which BNSF attributed primarily to “higher grain exports, as well as higher volumes of ethanol and related commodities.”
• Industrial Products’ operating revenues came in at $1.352 billion, gaining 17% from 2020. Volumes increased 18% “primarily due to continued recovery in the U.S. industrial economy driving higher volumes in the construction and building sectors, partially offset by lower petroleum volumes due to reduced production and demand in the energy sector,” according to BNSF.
• For Coal, operating revenue was $767 million. Volumes increased 32%, which the railroad said was “primarily due to increased electricity generation, and due to higher natural gas prices as well as utilities rebuilding inventory in the second quarter after draw-downs earlier in the year.”
• Operating expenses increased 25% vs. the 2020 period. This “reflected higher volumes and higher average fuel prices offset by productivity improvements,” BNSF said, noting a 17% higher compensation and benefits expense; a 23% higher purchased services expense “primarily due to higher volumes, insurance recoveries in 2020 related to 2019 flooding, and higher volume-driven purchased transportation costs of our logistics services business, offset by improved productivity”; a 112% increase in fuel expense; and a 20% increase in materials and other expenses.
