(Union Pacific issued the following news release on April 21.)
OMAHA, Neb. — Union Pacific Corporation today reported earnings of $.48 per diluted share, or net income of $128 million in the first quarter of 2005 compared to earnings of $.63 per diluted share, or net income of $165 million for the first quarter of 2004.
“Operationally, our performance has improved since the beginning of the year, but our earnings were impacted by the network challenges we continue to face as well as the West Coast storm. We estimate that the storm adversely affected net income by approximately $34 million,” said Dick Davidson, chairman and chief executive officer. “The bright spot continues to be the strong demand, particularly in our Energy and Industrial Products markets. Operating revenue grew by nine percent to $3.2 billion — a first quarter record and the fourth consecutive quarter that we’ve topped the $3 billion mark.”
First Quarter Overview
Union Pacific Corporation reported record operating revenue of $3.2 billion in the first quarter of 2005 compared to last year’s $2.9 billion. Operating income in the first quarter of 2005 was $313 million compared to $314 million for the same period in 2004.
* Commodity revenue was a first quarter record of $3.0 billion, up 8 percent, compared to $2.8 billion in 2004. Drivers of the increase were a 1 percent increase in volumes as well as higher fuel surcharge recoveries and improved yields.
* First quarter 2005 average revenue per car was at an all-time best of $1,306 per car, versus $1,214 in the first quarter of 2004.
* The operating margin decreased to 9.9 percent in the first quarter of 2005 from 10.9 percent in 2004, primarily due to the impact of the January storm and higher fuel prices.
* The Railroad’s average quarterly fuel price of $1.45 per gallon compares to $1.02 per gallon paid a year ago.
* Although impacted by the January storm, quarterly average system speed, as reported to the Association of American Railroads, averaged 21.1 mph, 0.8 mph slower than the first quarter of 2004, but 0.6 mph higher than the prior quarter.
2005 First Quarter Commodity Revenue Summary versus 2004
* Energy up 14 percent
* Industrial Products up 12 percent
* Agriculture up 9 percent
* Chemicals up 8 percent
* Intermodal up 3 percent
* Automotive down 1 percent
“Energy and Industrial Products posted best-ever revenue performances this quarter,” Davidson said. “We see solid demand continuing, with the primary exception being Automotive, which has been affected by softer auto production.”
Looking Forward
“Improvements in our operating metrics are encouraging. Although we’ll face daily challenges, we believe our network management initiatives are gaining traction and we will work to build on that momentum,” Davidson said. “Demand for our services remains strong and our task is to leverage that strength into better bottom-line results. As we continue to restore fluidity to our network, our customers, our employees and our shareholders will benefit.”
Union Pacific Corporation owns 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. The Railroad 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 serving all six gateways to Mexico, Union Pacific has the premier rail franchise in North America.