UPDATE 3-BNSF results hit by charge, but prices stay strong

(Adds CEO comment on coal)

CHICAGO, July 24 (Reuters) - The second-largest U.S. railroad, Burlington Northern Santa Fe Corp (BNI.N: Quote, Profile, Research, Stock Buzz), reported lower net income, citing a $175 million charge related to environmental issues in Montana, a soft economy, high fuel costs and floods in the Midwest.

But the railroad reported continued strong pricing and higher revenue, despite a weak economy.

The Ft. Worth, Texas-based company reported second-quarter net income on Thursday of $350 million, or $1 a share, compared with $433 million, or $1.20 a share, a year earlier.

BNSF said the charge due to "environmental matters" in Montana was equivalent to 31 cents per share. The company also reported a charge of $15 million, or 3 cents per share, for additional personal injury accruals.

Excluding those items, BNSF earned $1.34 per share. Analysts had on average expected earnings per share for the quarter of $1.30, excluding items, according to Reuters Estimates. On that basis, the company's profit came in above forecasts.

Revenue in the quarter rose to $4.49 billion from $3.84 billion a year earlier. Analysts had expected revenue of $4.44 billion.

Fuel costs in the quarter rose 61 percent to $1.25 billion from $771 million.

Freight volumes fell 3 percent, but average revenue per carload rose 20 percent.