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Spokane, Washington  Est. May 19, 1883

Earnings roundup : BNSF profits soar 21 percent; Yahoo recovers

Associated Press The Spokesman-Review

Burlington Northern Santa Fe Corp. said Tuesday its fourth-quarter profit rose 21 percent because of strong demand for shipping coal and agricultural and consumer goods.

The company’s chief executive said the sluggish housing market has depressed shipments of building products, but he predicted record volume in 2007 for other parts of the business.

Burlington Northern said first-quarter earnings would be about flat with the fourth quarter, but that for all of 2007 freight revenue will rise 7 percent to 8 percent and earnings per share will increase by a low-teens percentage.

The report from Burlington Northern, the nation’s largest railroad by freight revenue in the third quarter, came a day after No. 3 CSX Corp. said its fourth-quarter profit rose 46 percent and it forecast a double-digit increase in earnings this year partly because of its power to raise rates.

The stock of both companies rose in trading on the New York Stock Exchange Tuesday. Burlington Northern shares gained $2.97, or 3.9 percent, to close at $80.10, and CSX shares added $1.56 cents, or 4.4 percent, to $36.66.

Burlington Northern said its fourth-quarter earnings rose to $519 million, or $1.42 per share, from $430 million, or $1.13 per share, a year ago. The most-recent quarter included a gain of $12 million, or 3 cents per share, from a tax adjustment.

Analysts surveyed by Thomson Financial expected $1.39 per share.

Revenue grew 9 percent to $3.88 billion from $3.55 billion a year ago, and topped the $3.72 billion consensus estimate of analysts.

The railroad said revenue from coal shipments, driven by freight out of the Powder River Basin in Wyoming, grew 22 percent to $775 million. Revenue from agricultural shipments rose 9 percent to $646 million, due mostly to strength in corn and fertilizer shipments.

Revenue from consumer products rose 6 percent to $1.46 billion because of double-digit gains in automotive and international intermodal shipments. Intermodal service involves transferring freight among types of transportation, such as loading shipping containers on rail cars for final delivery.

Chairman and Chief Executive Matthew Rose said that while shipments of building products were sluggish, that accounted for only 3 percent of the company’s revenue.

Rose said freight revenue would grow 5 to 6 percent in the first quarter, but higher fuel costs would result in earnings for the January-March period being about flat with October-December. For the full year, however, he said earnings per share would grow by a low-teens percentage.

Rose predicted record shipments of coal, agricultural products and intermodal freight in 2007.

Yahoo Inc.’s fourth-quarter profit topped analyst expectations to end a recent streak of financial letdowns at the Internet bellwether.

The Sunnyvale-based company said Tuesday that it earned $268.7 million, or 19 cents per share, during the final three months of 2006, traditionally the peak season for Web sites like Yahoo that depend on advertising for most of their revenue.

The profit declined 61 percent from net income of $683.2 million, or 46 cents per share, at the same time in 2005, but the two quarters didn’t provide an apples-to-apples comparison. That’s because a one-time gain of $310 million boosted the 2005 results while the 2006 figures included stock option expenses that weren’t recorded on Yahoo’s books in the previous year.

“Copier and printer maker Xerox Corp. said Tuesday its fourth-quarter profit dipped 24 percent, weighed down by a higher restructuring charge, but it beat expectations of analysts.

Net income fell to $214 million, or 22 cents per share, compared with $282 million, or 27 cents per share, during the same period of 2005.

The Stamford-based company said its latest results included a $160 million, or 16 cents per share, restructuring charge. The 2005 fourth-quarter results included a $51 million, or 5 cents per share, restructuring charge.

Advanced Micro Devices Inc., the world’s No. 2 microprocessor maker behind Intel Corp., said Tuesday that it swung to a loss in the fourth quarter as the company incurred heavy costs related to its acquisition of graphics chip maker ATI Technologies Inc., negating record processor sales.

For the quarter ended Dec. 31, the Sunnyvale-based company posted a net loss of $574 million, or $1.08 per share. For the same quarter last year, AMD earned $96 million, or 21 cents per share.

AMD said after the markets closed that the fourth-quarter figures include $550 million, or $1.04 per share, in acquisition-related charges and $27 million, or 5 cents per share, in stock-based compensation expense.

Sun Microsystems Inc. returned to solid profitability Tuesday after years of red ink, easily exceeding Wall Street’s tepid expectations thanks to the growing popularity of its corporate computers and its newest operating system for servers.

For the three months ended Dec. 31, the server and software maker earned $126 million, or 3 cents per share, up from a net loss of $223 million, or 7 cents per share, in the year-ago period.

Fiscal first-quarter revenue totaled $3.57 billion, up 7 percent from $3.34 billion in the year-ago period.