UP reports 2Q 2017 results
(Source: Union Pacific press release, July 20, 2017)
OMAHA, Neb. — Union Pacific Corporation today reported 2017 second quarter net income of nearly $1.2 billion, a second quarter record of $1.45 per diluted share. This compares to about $1.0 billion, or $1.17 per diluted share, in the second quarter 2016. Union Pacific also reported a second quarter record operating ratio of 61.8 percent, a 3.4 point improvement compared to the second quarter 2016 operating ratio.
Second quarter 2017 highlights:
• Diluted earnings per share of $1.45 increased 24 percent.
• Operating income totaled $2.0 billion, up 21 percent.
• Operating ratio of 61.8 percent improved 3.4 points.
“I am pleased with our results through the first six months, and look forward to continuing our momentum through the remainder of the year,” said Lance Fritz, Union Pacific chairman, president and chief executive officer. “Guided by our strategic value tracks, our entire team is focused on providing an excellent customer experience while safely and efficiently delivering on our innovative productivity initiatives.”
Second Quarter Summary
Operating revenue of $5.3 billion was up 10 percent in the second quarter 2017 compared to the second quarter 2016. Second quarter business volumes, as measured by total revenue carloads, increased 5 percent compared to 2016. Volume increases in coal, industrial products, agricultural products and intermodal more than offset declines in chemicals and automotive. In addition:
• Quarterly freight revenue improved 11 percent compared to the second quarter 2016, as volume growth, increased fuel surcharge revenue, core pricing gains and positive mix of traffic all contributed to the increase.
• Union Pacific’s second quarter record operating ratio of 61.8 percent improved 3.4 points compared to the second quarter 2016. Higher fuel prices positively impacted the operating ratio by a half of a point.
• The $1.69 per gallon average quarterly diesel fuel price in the second quarter 2017 was 17 percent higher than the second quarter 2016.
• Quarterly train speed, as reported to the Association of American Railroads, was 25.4 mph, 5 percent slower than the second quarter 2016.
• Union Pacific’s first half reportable personal injury rate of 0.76 per 200,000 employee-hours increased from the record first half rate of 0.70 achieved in 2016.
• The Company repurchased 7.8 million shares in the second quarter 2017 at an aggregate cost of $850 million.
Summary of Second Quarter Freight Revenues
• Intermodal up 3 percent
• Chemicals up 4 percent
• Automotive up 5 percent
• Agricultural Products up 7 percent
• Industrial Products up 24 percent
• Coal up 25 percent
2017 Outlook
“Absolute business volumes should be stronger in the second half than the first half, although year-over-year comparisons will be more challenging. In this environment we will focus on our growth opportunities. In addition, we will continue to make progress on our G55 + 0 initiatives as we work to make Union Pacific a stronger, more efficient company,” Fritz said. “We are confident these efforts will generate top-line growth, margin improvement and greater returns for our shareholders.”
Monday, July 24, 2017