Union Pacific reports record first quarter as earnings jump 43 percent
(Union Pacific issued the following on April 22, 2010.)
OMAHA, Neb. Union Pacific Corporation (NYSE: UNP) today reported 2010 first quarter net income of $516 million, or $1.01 per diluted share, compared to $362 million, or $0.72 per diluted share in the first quarter 2009.
First quarter 2010 records are as follows:
* Diluted earnings per share improved 40 percent to $1.01. * Operating income totaled $988 million, up 47 percent. * Net income increased 43 percent to $516 million. * Operating ratio was 75.1 percent, a first quarter record and 5.3 points better than first quarter 2009. * Customer Satisfaction Index of 87 ties a first quarter best.
"Union Pacific's record first quarter was a strong start for the year," said Jim Young, Union Pacific chairman and chief executive officer. "We saw quarterly volume growth on our railroad for the first time in two years, and we leveraged that volume by running a safe, service-focused, and efficient network. These efforts resulted in a best ever first quarter operating ratio and generated strong cash from operations, setting a solid foundation for future opportunity and growth."
First Quarter Summary
First quarter business volumes, as measured by total revenue carloads, grew 13 percent versus the prior year's recession-impacted levels. Five of Union Pacific's six business groups reported quarterly growth, with only Energy volumes declining versus first quarter 2009. Quarterly volume growth contributed to a 16 percent increase in first quarter 2010 operating revenues of $4.0 billion versus $3.4 billion in the first quarter 2009. In addition:
Year-over-year freight revenues increased in all six business groups, up 16 percent in total to $3.8 billion in the first quarter 2010 as a result of double-digit volume gains, increased fuel cost recoveries associated with higher diesel fuel prices, and core pricing gains.
Quarterly diesel fuel prices increased 43 percent from an average of $1.51 per gallon in the first quarter 2009 to an average of $2.16 per gallon.
Union Pacific's operating ratio improved to 75.1 percent from 80.4 percent in 2009, setting a first quarter record as strong volume growth coupled with ongoing efficiency initiatives and pricing gains drove margin expansion.
The Company's Customer Satisfaction Index of 87 tied 2009's first quarter best.
Quarterly train speed, as reported to the Association of American Railroads, was 26.2 mph, down 4 percent versus record first quarter 2009 velocity. Rail car inventory declined 3 percent in the first quarter of 2010 as improved freight car utilization allowed the Company to handle increased business levels with fewer freight car resources.
First quarter results include the impact of a $45 million one-time payment to CSXI as part of the transaction to restructure our intermodal transportation relationship.
Summary of First Quarter Freight Revenues:
* Automotive was up 88 percent. * Intermodal was up 25 percent. * Chemicals was up 14 percent. * Agricultural was up 10 percent. * Industrial Products was up 10 percent. * Energy was up 5 percent.
Outlook
"Although the strength and timing of a sustained economic recovery are still uncertain, we are feeling better about our 2010 growth opportunities," Young said. "Our plan is to remain flexible and run a safe, efficient network that generates significant volume leverage. As customers continue to benefit from UP's strong value proposition, we expect to attract new business to the railroad while delivering higher shareholder returns."
About Union Pacific
Union Pacific Corporation owns one of America's leading transportation companies. Its principal operating company, Union Pacific Railroad, links 23 states in the western two-thirds of the country. Union Pacific serves many of the fastest-growing U.S. population centers and provides Americans with a fuel-efficient, environmentally responsible and safe mode of freight transportation. Union Pacific's diversified business mix includes Agricultural Products, Automotive, Chemicals, Energy, Industrial Products and Intermodal. The railroad emphasizes excellent customer service and offers competitive routes from all major West Coast and Gulf Coast ports to eastern gateways. Union Pacific connects with Canada's rail systems and is the only railroad serving all six major gateways to Mexico, making it North America's premier rail franchise.
