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Original headline: Berkshire Hathaway ( BRK - B ): Is BNSF Still a Strong Home for Reinvested Capital ?
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- Greg Abel Says Every Point of BNSF Profit Margin Adds About $230 Million of Cash Flow for Berkshire Hathaway
BNSF, Berkshire Hathaway's railroad, accounts for more than 10% of the conglomerate's operating income, and CEO Greg Abel expects that share to grow. In his first shareholder letter, Abel said each one-percentage-point gain in operating margin generates about $230 million of incremental operating cash flow. On BNSF's 2025 revenue of $23.5 billion and 34.5% operating margin, the article estimates roughly $8.1 billion of operating cash flow. Citing rivals Union Pacific (about 40%) and CSX (about 38%), it says a three-point margin gain to CSX's level would add roughly $700 million in pretax income a year. With 3% annual revenue growth as well, BNSF's contribution could roughly double within five years to around $10 billion per year.
- BNSF Paid Berkshire Hathaway $4.4 Billion in Dividends Last Year. Berkshire Bought It for $34.5 Billion in 2010.
According to Greg Abel's 2025 shareholder letter, BNSF, the railroad owned by Berkshire Hathaway, generated $8.1 billion in operating earnings in 2025, and $4.4 billion of that was paid to Berkshire as a cash dividend, with the company on pace to at least match that again this year. In the first half of 2026, BNSF's operating earnings reached just over $2.9 billion, up nearly 10% year over year. Berkshire paid $34.5 billion for BNSF in 2010, and the effective dividend yield on that initial investment is now 12.7% after 16 years, not counting the appreciation of the railroad's value. Estimates of BNSF's market value range from $75 billion to $200 billion, and Warren Buffett has described it as Berkshire's second-most-valuable asset, mainly because of the cash it produces. The author suggests shareholders might prefer that Abel make more acquisitions of small cash-generating companies rather than use Berkshire's $365.5 billion in uninvested cash to buy stocks.
- Harvard's Judgment Professor: The Curse of Optionality and One Habit That Builds Better Judgment
Part 2 of Motley Fool's Hidden Gems Investing podcast features contributor Rachel Warren speaking with Reza Satchu, a Harvard Business School senior lecturer and six-time founder. Satchu outlines a three-word framework for separating real conviction from hype: authenticity, momentum and inevitability. He argues that capital allocation is the sharpest test of a CEO's judgment. His biggest regret as a founder is waiting too long to fire people, since tolerating underperformance damages the entire culture. The discussion also covers the “curse of optionality” that keeps talented people from committing to anything. The episode was recorded on September 20, 2026.
- Norfolk Southern ( NSC ) Q3 2026 Earnings Call Transcript
Norfolk Southern (NSC) reported Q3 revenue of $3.5 billion, up 14% on 3% higher volume and fuel surcharges, and adjusted diluted EPS of $3.62, up 10%. The adjusted operating ratio rose 210 basis points to 65.4% under fuel-cost pressure, while revenue less fuel hit a quarterly record and adjusted operating income grew 7% to $1.2 billion. Management raised its capital expenditure guidance to $2.1 billion from $1.9 billion and cited a company-best train accident rate of 1.74. It warned that some highway-to-rail volume gains could revert if fuel prices fall, and that war and trade uncertainty will keep weighing on international volumes.
- CSX : 3 Key Takeaways for Long - Term Investors
On its third-quarter 2026 earnings call on Oct. 21, 2026, CSX reported EPS up 30% from last year's adjusted result. Management cut nonfuel costs by 3% while handling 5% more volume, expanding operating margin by over four percentage points. Tight truck capacity and high diesel prices pushed freight to rail, lifting intermodal volume 7% year over year to an all-time record. CEO Stephen F. Angel expects full-year operating margin expansion of more than 350 basis points, while the company watches conductor trainee staffing.
- FreightCar America Advances Aftermarket Growth Strategy with Third Acquisition in Less Than a Year
FreightCar America (NASDAQ: RAIL) has completed its acquisition of Trinity Equipment Company (TEC), a Michigan-based supplier of OEM and replacement railcar components and industrial fastening solutions, marking its third acquisition in less than a year. The deal broadens the product range, customer relationships and distribution capabilities of FreightCar America's aftermarket business, creating opportunities to grow sales with new and existing customers. The company expects the transaction to be immediately accretive.
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