OMAHA — Union Pacific Corporation today reported an all-time record net income for the third quarter of $437 million, or $1.63 per diluted share. This is compared to net income of $267 million, or $1.04 per diluted share, in the third quarter of 2001. Third quarter results included income gains from a transaction with the Utah Transit Authority, as well as a tax settlement. Excluding these items, quarterly earnings were $1.19 per diluted share – a 14 percent increase over third quarter 2001.
“Union Pacific combined record revenues with all-time productivity levels to produce great results,” said Dick Davidson, chairman and chief executive officer. “We achieved double-digit growth in earnings per share for the fourth straight quarter. This trend is further proof that our business strategy is on target.”
Third Quarter Highlights
For the third quarter, Union Pacific Corporation, excluding Overnite, reported record operating income of $619 million compared to $556 million for the same period in 2001.
All-time quarterly records were:
— Operating Revenue – $2.85 billion
— Commodity Revenue – $2.73 billion
— Operating Margin (operating income/operating revenue) – 21.7 percent
— Operating Ratio (operating expense/operating revenue) – 78.3 percent
— Employee Productivity (gross ton-miles in millions/average employees) – 5.29
— Total Revenue Carloads – 2.36 million
Third Quarter Railroad Commodity Revenue Summary versus 2001:
— Overall, commodity revenue was up 4 percent.
The following commodity groups had revenue growth ranging from 13 percent to 2 percent:
— Automotive up 13 percent
— Intermodal up 9 percent
— Agricultural up 4 percent
— Industrial Products up 4 percent
— Chemicals up 2 percent
Energy was the only commodity group that was down, at 3 percent.
“We have been facing some challenges in the wake of the port disruption,” said Davidson. “Fortunately, our strong rail franchise gives us the revenue diversity and network flexibility to rebound rapidly. We remain focused on reducing costs and improving service as we work to meet Union Pacific’s commitment to our customers and shareholders.”
Overnite Corporation
Overnite Corporation reported a 19 percent increase in third quarter operating income of $25.6 million, compared to $21.5 million in 2001 on a pro forma basis. (Pro forma results for 2001 include $3.2 million of operating income from Motor Cargo, which was acquired on November 30, 2001.) Operating revenues increased 7 percent to $349.6 million from $327.8 million last year. Overnite’s 2002 operating ratio improved 0.7 percentage points to 92.7 percent from 93.4 percent in 2001.
“Overnite made an impressive contribution to the quarter with its best overall quarterly performance since 1994,” Davidson said.
Year-to-Date Operating Income Up 16 Percent
For the first nine months of 2002, Union Pacific Corporation reported a 16 percent increase in operating income to $1.7 billion compared with $1.5 billion in 2001. Net income rose 39 percent to $963 million, versus $691 million for the same period a year ago.
In addition, the year-to-date operating ratio for Union Pacific Corporation, excluding Overnite, decreased over two percentage points to 79.7 percent from 81.9 percent in 2001 (operating margin improved to 20.3 percent from 18.1 percent over the same period).
Union Pacific Corporation is one of America’s leading transportation companies. Its principal operating company, Union Pacific Railroad, is the largest railroad in North America, covering 23 states across the western two-thirds of the United States. A strong focus on quality and a strategically advantageous route structure enable the company to serve customers in critical and fast growing markets. It is a leading carrier of low-sulfur coal used in electrical power generation and has broad coverage of the large chemical- producing areas along the Gulf Coast. With competitive long-haul routes between all major West Coast ports and eastern gateways, and as the only railroad to serve all six gateways to Mexico, Union Pacific has the premier rail franchise in North America. The Corporation’s trucking operations include Overnite Corporation, which owns its less-than-truckload carriers Overnite Transportation and Motor Cargo.