Union Pacific reports Q2 2020 financial results
(Source: Union Pacific press release, July 23, 2020)
OMAHA, Neb. — Union Pacific Corporation today reported 2020 second quarter net income of $1.1 billion, or $1.67 per diluted share. This compares to $1.6 billion, or $2.22 per diluted share, in the second quarter 2019.
“The Second Quarter proved very challenging as we faced a volume decline of 20 percent due to the economic impact of the COVID-19 pandemic. Demonstrating the transformation our Company is experiencing through the implementation of Unified Plan 2020, we were able to largely mitigate the impact of that volume loss,” said Lance Fritz, Union Pacific chairman, president and chief executive officer. “Our dedicated employees are feeling a very real impact from this pandemic, making tangible sacrifices. Despite this adversity, they continue to make strides to improve the safety of our railroad, while providing our customers an uninterrupted, enhanced service product.”
Second Quarter Summary
Operating revenue of $4.2 billion was down 24 percent in second quarter 2020, compared to second quarter 2019. Second quarter business volumes, as measured by total revenue carloads, decreased 20 percent compared to 2019. Volumes for all three business teams – bulk, industrial, and premium – declined in the quarter due to the deteriorating economic conditions brought on by the COVID-19 pandemic. In addition:
• Quarterly freight revenue declined 24 percent, compared to second quarter 2019, as core pricing gains were offset by lower volumes, negative business mix and decreased fuel surcharge revenue.
• Union Pacific’s 61 percent operating ratio increased 1.4 points compared to second quarter 2019.
• Union Pacific recognized a $69 million gain from a real estate sale to the Illinois State Toll Highway Authority.
• The $1.26 per gallon average quarterly diesel fuel price in second quarter 2020 was 43 percent lower than second quarter 2019.
• Union Pacific’s first half reportable personal injury rate of 0.83 incidents per 200,000 employee hours improved 5 percent compared to first half 2019.
• Quarterly freight car velocity was 225 daily miles per car, an 11 percent improvement compared to second quarter 2019.
• Quarterly locomotive productivity was 136 GTMs per horsepower day, a 12 percent improvement compared to second quarter 2019.
• Average maximum train length was 8,664 feet, a 13 percent increase compared to second quarter 2019.
Summary of Second Quarter Freight Revenues
• Bulk down 17 percent
• Industrial down 23 percent
• Premium down 33 percent
2020 Outlook
Although the state of global economy is somewhat uncertain given the lingering impact of the COVID-19 pandemic, Union Pacific currently expects full year 2020 carload volumes to be down around 10 percent or so compared to 2019.
“Our first priority continues to be the health and safety of our employees during the pandemic, as they perform critical service to support economic recovery,” Fritz said. “Our ability to be nimble and flexible in adjusting our resources to rapidly changing volumes, while providing a high level service product, demonstrates the strength of our service model. We remain focused on providing our customers with a safe, reliable and efficient service product.”
Thursday, July 23, 2020