(Source: Union Pacific press release, July 19, 2018)
OMAHA, Neb. — Union Pacific Corporation today reported 2018 second quarter net income of $1.5 billion, or a second quarter record $1.98 per diluted share. This compares to $1.2 billion, or $1.45 per diluted share, in the second quarter 2017.
Second Quarter Results
• Diluted earnings per share of $1.98 increased 37 percent.
• Operating income totaled $2.1 billion, up 5 percent.
• Operating ratio of 63.0 percent, up 1.1 points (see footnote).
“Overall, I am pleased with the effort put forth by the entire Union Pacific team; however, I recognize the results could have been better,” said Lance Fritz, Union Pacific chairman, president and chief executive officer. “Network performance improved significantly coming out of the First Quarter, but a tunnel outage and train-crew shortages created a headwind in June. I am confident we have the right plans in place to drive improvement in our operations and a better service experience for our customers.”
Second Quarter Summary
Operating revenue of $5.7 billion was up 8 percent in the second quarter 2018 compared to the second quarter 2017. Second quarter carloads increased 4 percent compared to 2017. Volume increases in industrial and premium more than offset declines in agricultural products and energy. In addition:
• Quarterly freight revenue improved 8 percent compared to the second quarter 2017, as volume growth, increased fuel surcharge revenue, and core pricing gains were partially offset by negative mix of traffic.
• Union Pacific’s 63.0 percent operating ratio increased 1.1 points (see footnote) compared to the second quarter 2017.
• The $2.30 per gallon average quarterly diesel fuel price in the second quarter 2018 was 36 percent higher than the second quarter 2017.
• Quarterly train speed, as reported to the Association of American Railroads, was 24.7 mph, 3 percent slower than the second quarter 2017.
• Union Pacific’s first half reportable personal injury rate of 0.76 per 200,000 employee hours was flat compared to the first half of 2017.
• The Company repurchased 33.2 million shares in the second quarter 2018, including 19.9 million shares received as part of an accelerated share repurchase program.
Summary of Second Quarter Freight Revenues
• Agricultural Products up 5 percent
• Energy up 5 percent
• Industrial up 8 percent
• Premium up 14 percent
“Looking to the remainder of the year, we expect the strong business environment to continue as we regain our productivity momentum and improve the value proposition for all of our stakeholders,” Fritz said.
Footnote 1: Certain prior period amounts have been adjusted for the retrospective adoption of Accounting Standard Update 2017-07 related to the presentation of the components of net periodic pension and other postretirement benefit costs.
Friday, July 20, 2018