BNSF Releases 1Q21 Earnings

Written by Marybeth Luczak, Executive Editor
“Growth in both international and domestic intermodal shipments was driven by increased retail sales and inventory replenishments by retailers, along with increased e-commerce activity,” BNSF said in its first-quarter 2021 earnings report.

“Growth in both international and domestic intermodal shipments was driven by increased retail sales and inventory replenishments by retailers, along with increased e-commerce activity,” BNSF said in its first-quarter 2021 earnings report.

For first-quarter 2021, BNSF posted revenues of $5.401 billion, virtually flat with the year-earlier period, and volumes of 2.449 million, led by Consumer and Agricultural products, the railroad reported May 3.

The change in revenue—a 0.3% decrease from $5.417 billion in first-quarter 2020—“was primarily due to a 5% increase in unit volume offset by a 5% decrease in average revenue per unit,” according to the BNSF earnings announcement.

Average revenue per unit was down, the railroad noted, “as a result of business mix changes and lower fuel surcharge revenue, due to lower fuel prices.”

Operating income for the first three months of 2021 was $1.9 billion, up 4% from the 2020 period, and the operating ratio was 63.7% vs. 65.2% in 2020.

Other first-quarter 2021 highlights:

• On the Consumer Products side, operating revenues were $1.890 billion, up 7% over the same period last year, and volumes rose 15%. “Growth in both international and domestic intermodal shipments was driven by increased retail sales and inventory replenishments by retailers, along with increased e-commerce activity,” the railroad said. “Automotive volumes declined due to production impacts from a global microchip shortage.”

• For Agricultural Products, operating revenues came in at $1.307 billion, rising 14% over the year-ago period. Volumes grew 12% compared with 2020 “due to higher grain exports.”

• Industrial Products’ operating revenues were $1.226 billion, falling 16% from the same point in 2020. Volumes decreased 13%, which the railroad attributed, primarily, to “reduced production and demand in the energy sector, which drove lower petroleum products and sand volume. In addition, shipments of chemicals, plastics and aggregates were lower due to winter storm related impacts to Texas and the U.S. Gulf Coast regions.”

• For Coal, operating revenue of $686 million was down 10% from first-quarter 2020. Volumes fell 12% vs. 2020, which BNSF attributed, primarily, to “lower utility demand in the early part of the quarter, along with severe winter weather, which impacted deliveries.”

• Operating expenses fell 2% vs. the 2020 period. This “reflected increased volume-related costs and inflation, offset by productivity improvements and lower average fuel prices,” BNSF said, noting a 5% lower compensation and benefits expense; a 10% decrease in fuel expense; and a 12% increase in materials and other expenses.

“The COVID-19 pandemic caused a significant economic slowdown that adversely affected the demand for our services in 2020,” according to BNSF parent company Berkshire Hathaway’s recently filed first-quarter report. “The effects of the COVID-19 pandemic are ongoing, and the full extent to which it may impact our business and financial results remain uncertain.”

Categories: Class I, Freight, Intermodal, News Tags: ,