(Source: Union Pacific press release, April 23, 2015)
OMAHA, Neb. — Union Pacific Corporation today reported 2015 first quarter net income of $1.2 billion, or $1.30 per diluted share, compared to $1.1 billion, or $1.19 per diluted share, in the first quarter 2014.
First Quarter Highlights
• Diluted earnings per share of $1.30 improved 9 percent.
• Operating income totaled $2 billion, up 7 percent.
• Operating ratio of 64.8 percent improved 2.3 points.
“Union Pacific achieved 9 percent earnings per share growth in the first quarter, as solid core pricing gains were partially offset by a sharp drop in volume,” said Lance Fritz, Union Pacific president and chief executive officer. “While we took actions during the quarter to adjust for the volume decline, we did not run an efficient operation. We are taking the steps to align our resources with current demand, while remaining agile in an ever-changing environment.”
First Quarter Summary
Operating revenue of $5.6 billion was flat in the first quarter 2015 versus the first quarter 2014. First quarter business volumes, as measured by total revenue carloads, declined 2 percent compared to 2014. Volume declines in coal, industrial products, intermodal and chemicals more than offset the growth in automotive and agricultural products. In addition:
• Quarterly freight revenue decreased 1 percent compared to the first quarter 2014, as lower fuel surcharge revenue and the volume decline more than offset core pricing gains and positive business mix.
• Union Pacific’s 64.8 percent operating ratio was 2.3 points better than the first quarter 2014. The operating ratio benefited in the quarter about 3 points from lower fuel prices, including the lag impact of fuel surcharge.
• The $1.95 per gallon average quarterly diesel fuel price in the first quarter 2015 was down 38 percent compared to the first quarter 2014.
• Quarterly train speed, as reported to the Association of American Railroads, was 24.6 mph, about flat when compared with the first quarter 2014.
• The Company repurchased almost 6.9 million shares in the first quarter 2015 at an aggregate cost of $807 million.
• Union Pacific has adjusted its 2015 capital program down $100 million to approximately $4.2 billion.
Summary of First Quarter Freight Revenues
• Automotive up 6 percent
• Agricultural Products up 3 percent
• Industrial Products up 1 percent
• Chemicals flat
• Coal down 5 percent
• Intermodal down 5 percent
2015 Outlook
“We’ve had some challenges to start off the year, but we’re taking the steps needed to work through those challenges and realize the opportunities we see ahead,” Fritz said. “We expect to see solid improvement in network performance and cost efficiency over the coming months. As we leverage the strengths of our diverse franchise, we continue to be intently focused on safety, service and shareholder returns.”