(Union Pacific issued the following on April 23, 2009.)
OMAHA, Neb. — Union Pacific Corporation (NYSE: UNP) today reported 2009 first quarter net income of $362 million, or $0.72 per diluted share, compared to $443 million, or $0.85 per diluted share for the first quarter 2008.
First Quarter 2009 Highlights
* Diluted earnings per share declined 15 percent to $0.72.
* Average quarterly diesel fuel prices decreased 47 percent.
* Operating income totaled $672 million, down 15 percent.
* Productivity contributed to a record first quarter operating ratio of 80.3 percent.
* Customer Satisfaction Index reached a quarterly best 87, up 6 points.
* Strong service performance drove quarterly pricing gains.
“Union Pacific produced solid quarterly results despite the challenging economy,” said Jim Young, Union Pacific chairman and chief executive officer. “We took decisive steps to reduce costs across our Company, while also making strong improvements in our safety performance, operating productivity and customer service.”
First Quarter Summary
The weak global economy affected all six of Union Pacific’s business groups. First quarter 2009 operating revenues totaled $3.4 billion versus $4.3 billion in the first quarter 2008. In addition:
* Business volumes, as measured by total revenue carloads, were down 21 percent versus the first quarter 2008. This decline drove lower year-over-year freight revenues, down 20 percent to $3.2 billion in the first quarter 2009. Another reason for decreased freight revenues was a $306 million year-over-year reduction in first quarter 2009 fuel surcharge revenue.
* Operating expenses in the first quarter 2009 declined 21 percent versus year-ago levels. The Company’s cost saving initiatives associated with lower volumes and improved efficiency contributed to the decline. In addition, quarterly diesel fuel prices decreased 47 percent year-over-year to an average of $1.51 per gallon, lowering quarterly operating expenses.
* Union Pacific’s operating ratio improved 1.2 points to 80.3 percent, a first quarter record.
* The Customer Satisfaction Index improved by six points over the first quarter 2008 to a record 87.
* Quarterly average train speed, as reported to the Association of American Railroads, was 27.2 mph, up 5 mph versus the first quarter 2008, a 23 percent increase, reflecting productivity and operational improvements as well as lower volumes.
Summary of First Quarter Freight Revenues
* Energy was down 6 percent.
* Agricultural was down 13 percent.
* Chemicals was down 15 percent.
* Intermodal was down 22 percent.
* Industrial Products was down 29 percent.
* Automotive was down 55 percent.
Outlook
“The difficult economic conditions continue to affect our business volumes,” Young said. “During this challenging time, we are reducing costs across the board, strengthening our operations and offering competitive supply chain solutions to our customers. We offer a safe, fuel-efficient, environmentally friendly transportation product that delivers value for our customers and the nation’s economy.”