(The following story by John D. Boyd appeared on The Journal of Commerce website on July 22, 2010.)
WASHINGTON, D.C. — Union Pacific Railroad turned in a second-quarter profit that was up 53 percent from a year earlier to $711 million, and was 17 percent of its $4.182 billion in receipts.
Despite widespread uncertainty about the pace of the economic recovery, UP’s chairman, president and CEO, James R. Young, said “we expect and are prepared to handle continued volume growth on our network, both in 2010 and beyond.”
UP said its revenue carloads rose 18 percent from the 2009 quarter, which marked the low point of the recession. Intermodal loadings rose 24 percent from a year ago, while the flattened automotive market of last year revived to push UP’s auto hauls up 71 percent and in turn pull up related cargoes of metals and ores.
Partly due to its pricing power, UP said average railcar revenue rose 8 percent in the April-June period, so its total revenue rose 27 percent. Included was a 10 percent gain in per-unit receipts for intermodal, 19 percent for automotive traffic and 13 percent for energy (mainly coal).
UP turned in its best-ever operating ratio of expenses to revenue, which at 69.4 percent was 8 points lower than a year ago. At the same time, Young said, customers gave UP an all-time high satisfaction rating.
UP cut by 3 percent its average workforce, the largest in the railroad industry, to 42,571 employees. UP has added jobs in most months this year.
One measure that went backward was average train speed, which slowed 4 percent from the 2009 period to 26.4 mph. Terminal time for trains also rose 1 percent to 24.7 hours. UP said its operations slowed in June due to flooding in the Midwest as well as from infrastructure repairs and upgrade work.