(Source: Union Pacific press release, April 27, 2017)
OMAHA, Neb. — Union Pacific Corporation today reported 2017 first quarter net income of nearly $1.1 billion, or a first quarter record $1.32 per diluted share. This compares to about $1.0 billion, or $1.16 per diluted share, in the first quarter 2016.
First Quarter Highlights
• Diluted earnings per share of $1.32 increased 14 percent.
• Operating income totaled $1.8 billion, up 6 percent.
• Operating ratio of 65.1 percent was flat.
“This is a very solid start to the year, especially given the weather challenges we encountered on the Western part of our network earlier in the quarter,” said Lance Fritz, Union Pacific chairman, president and chief executive officer.
“In keeping with our strategic value tracks, our engaged employees worked safely and productively under very difficult circumstances during the quarter. As a result, operations were restored quickly as we continued to focus on providing an excellent customer experience.”
First Quarter Summary
Operating revenue of $5.1 billion was up 6 percent in the first quarter 2017 compared to the first quarter 2016. First quarter business volumes, as measured by total revenue carloads, increased 2 percent compared to 2016. Volume increases in coal, agricultural products and industrial products more than offset declines in chemicals and automotive. Intermodal volume was flat compared to 2016 as increases in international intermodal offset declines in domestic shipments. In addition:
• Quarterly freight revenue improved 6 percent compared to the first quarter 2016, as volume growth, increased fuel surcharge revenue, core pricing gains and positive mix all contributed to the increase.
• Union Pacific’s 65.1 percent operating ratio was flat compared to the first quarter 2016. Higher fuel prices negatively impacted the operating ratio by about 1.3 points.
• The $1.75 per gallon average quarterly diesel fuel price in the first quarter 2017 was 40 percent higher than the first quarter 2016.
• Quarterly train speed, as reported to the Association of American Railroads, was 25.7 mph, 6 percent slower than the first quarter 2016.
• Union Pacific’s reportable personal injury rate of 0.89 per 200,000 employee-hours increased from the first quarter record of 0.75 achieved in 2016.
• The Company repurchased 7.5 million shares in the first quarter 2017 at an aggregate cost of $802 million.
Summary of First Quarter Freight Revenues
• Automotive down 1 percent
• Chemicals up 1 percent
• Intermodal up 3 percent
• Agricultural Products up 7 percent
• Industrial Products up 9 percent
• Coal up 25 percent
2017 Outlook
“With a solid first quarter performance behind us, we will continue to press ahead with our volume, pricing, and productivity initiatives through the remainder of the year,” Fritz said. “Our six-track value strategy will keep us intensely focused on effectively leveraging volume growth, while providing our customers an excellent experience and our shareholders a solid return on investment.”
First Quarter 2017 Earnings Conference Call
Union Pacific will host its first quarter 2017 earnings release presentation live over the Internet and via teleconference on Thursday, April 27, 2017 at 8:45 a.m. Eastern Time. The presentation will be webcast live over the internet on Union Pacific’s website at www.up.com/investor. Alternatively, the webcast can be accessed directly through the link above. Participants may join the conference call by dialing 877/407-8293 (or for international participants, 201/689-8349).