UNION PACIFIC JOCKEYS WITH BNSF FOR TITLE OF LARGEST RAILROAD AS EARNINGS SOAR OMAHA, NE -- Union Pacific Corp.'s 64 percent jump in fourth-quarter profit may have pleased investors, but it didn't definitively settle the question of which railroad is the nation's largest. Union Pacific said Thursday it earned $485 million, or $1.78 per share, during the quarter that ended Dec. 31. That's up from $296 million, or $1.10 per share, in the same period a year earlier. Union Pacific and competitor Burlington Northern Santa Fe Corp. have sparred for years over which one should be known as the nation's largest railroad. Earlier this week, BNSF renewed the argument when its earnings report revealed it was the nation's largest railroad by freight revenue in the third quarter of 2006. Union Pacific held the edge in fourth-quarter freight revenue with $3.78 billion, compared with BNSF's $3.77 billion. BNSF's claim also doesn't consider total revenue, where Union Pacific also held the edge, $3.96 billion to $3.88 billion, in the fourth quarter. The rest of the U.S. railroad universe includes CSX Corp., which reported $2.4 billion in revenue in the fourth quarter to remain No. 3, Norfolk Southern Corp., which had $2.32 billion in revenue, and Canadian National Railway Co., which had $1.64 billion in revenue. Canadian Pacific Railway Ltd. doesn't report earnings until Tuesday. But Union Pacific spokeswoman Kathryn Blackwell said those revenue figures shouldn't matter. She said the Omaha-based railroad bases its claim to be the nation's largest on the 32,400 miles of track it operates. BNSF remains close by that measure, too, with about 32,000 miles of track. The dispute may ultimately matter more to railroad buffs than corporate executives. "At the end of the day, it's not important to me," said Jim Young, Union Pacific's president and chief executive. "What's most important is looking at your service, your profitability, where you're going with the direction of the company." BNSF spokesman Pat Hiatte said his company is more concerned about improving its own performance than comparing itself with competitors. "That's really the focus: customer service and meeting the transportation needs of the country," Hiatte said. The dispute doesn't concern analysts either. They say investors should care more about which railroad is most profitable, not which one is bigger. "I don't think it matters one iota who is larger," said Randy Cousins, an analyst with BMO Capital Markets. In the arena of profits, Fort Worth, Texas-based BNSF was the leader last year with $1.89 billion to Union Pacific's $1.61 billion. Regardless of which railroad is bigger, both Union Pacific and BNSF reported strong performances this week. Union Pacific's earnings of $1.78 per share in the fourth quarter surpassed the expectations of analysts polled by Thomson Financial, which had forecast a profit of $1.57 per share. Union Pacific officials said greater efficiencies and strong demand for the coal and agricultural products it ships helped boost profits. It posted improved revenue in five of its six business groups, led by 20 percent increases from shipping agricultural and energy-related commodities. Revenue from industrial products fell slightly. The company also said its operating ratio, or the ratio of operating expenses to revenue and a key measure of efficiency for railroads, improved to 79.6 percent from 85.3 percent in 2005. Railroads typically target an operating ratio of 80 percent. BNSF reported Tuesday that earnings rose 21 percent in the fourth quarter. Union Pacific officials predict revenue growth in 2007 of 6 percent to 7 percent and growth in earnings per share of 10 percent to 15 percent. On Tuesday, BNSF officials forecast a 7 percent to 8 percent rise in freight revenue in 2007 and earnings per share percentage growth in the low teens. In trading Friday morning on the New York Stock Exchange, Union Pacific's shares fell 13 cents to $96.36, while BNSF's shares lost 48 cents to $77.80. - Josh Funk, The Associated Press, The San Diego Union-Tribune
In 2006, BNSF had about 6200 engines. At the end of 2003, UP had over 7800. See http://en.wikipedia.org/wiki/Union_Pacific_Railroad
Interesting....IIRC, before WWII the Pennsy was considered the "largest" RR in the World because of its ~30,000 miles of track and ~12,000 route miles.
I agree with the tenor of other comments...In some industries it may make some sense to measure a business' "size" by it's revenues, but with railroads it just sounds odd. A railroad's size is measured by the length of it's trackage, or perhaps it's amount of rail-riding equipment.
IIRC, in the transition era, ATSF had 14,000 or 15,000 route miles, but less engines and rolling stock than PRR. PC became the largest US railroad in 1968, but BN took the title two years later.
Size means nada if the railroad isn't moving freight efficiently. UP is making moves in that aspect( doubletracking the Sunset Route among other things), but it has a way to go.
Remember the 'Unlimited Parking' debacle in the late 90's?? BNSF has it share of bottlenecks as well, but with new blood in the CEO chair at UP, I think the Borg will improve operations considerably.