BNSF Railway boosted profit nearly 16 percent year-over-year to $701 million, as higher pricing and a 3 percent volume rise pushed revenue up 10.3 percent.
The railroad, owned by Warren Buffett’s Berkshire Hathaway, said revenue expand to slightly more than $5 billion on a 7 percent jump in average revenue per carload and unit, a key measure of pricing. A 6 percent rise in consumer product volume and an 11 percent jump in industrial product traffic more than offset 5 percent and 6 percent declines in coal and agriculture volume, respectively.
The industrial product volume was driven by increased demand for steel and frac sand shipments tied to domestic energy expansion. The declines in coal and agriculture shipments paralleled similar drops seen by other Class I railroads in the first quarter.
The railway’s ability to exercise strong pricing power on mild volume gains paralleled similar actions taken by CSX Transportation, Norfolk Southern and Union Pacific in the first quarter.
BNSF operating expenses rose $307 million, or roughly 9 percent, to $3.7 billion from the same period a year ago. Improved fuel efficiency was only able to partly offset a $156 million increase in fuel expenses, which was driven by higher prices and volume increases.