(Source: Union Pacific press release, January 22, 2015)
OMAHA, Neb. — Union Pacific Corporation today reported 2014 fourth quarter net income of $1.4 billion, or $1.61 per diluted share, compared to $1.2 billion, or $1.27 per diluted share, in the fourth quarter 2013.
All-Time Quarterly Records
• Diluted earnings per share of $1.61 improved 27 percent.
• Operating income totaled $2.4 billion, up 20 percent.
• Operating ratio of 61.4 percent improved 3.6 points.
Full Year Records
• Diluted earnings per share of $5.75 improved 22 percent.
• Operating revenues totaled $24.0 billion, up 9 percent.
• Operating income totaled $8.8 billion, up 18 percent.
• Operating ratio of 63.5 percent improved 2.6 points.
Fourth Quarter Summary
Operating revenue increased in the fourth quarter 2014 to $6.2 billion, a 9 percent increase over fourth quarter 2013. Fourth quarter business volumes, as measured by total revenue carloads, increased 6 percent compared to 2013. Volume increased in all business groups – led by growth in industrial products and coal. In addition:
• Quarterly freight revenue increased 9 percent compared to the fourth quarter 2013, driven by volume growth and core pricing gains.
• The average quarterly diesel fuel price of $2.66 per gallon in the fourth quarter 2014 was down 14 percent compared to the fourth quarter 2013.
• Union Pacific’s operating ratio of 61.4 percent was an all-time quarterly record, 3.6 points better than the fourth quarter 2013. The net impact of lower fuel prices contributed about 1.5 points of this improvement.
• Quarterly train speed, as reported to the Association of American Railroads, was 23.8 mph, 8 percent slower than the fourth quarter 2013.
• The Company repurchased more than 7.7 million shares in the fourth quarter 2014 at an average share price of $113.77 and an aggregate cost of $880 million.
Summary of Fourth Quarter Freight Revenues
• Industrial Products up 15 percent
• Intermodal up 11 percent
• Coal up 9 percent
• Agricultural Products up 9 percent
• Chemicals up 8 percent
• Automotive flat
2014 Full Year Summary
For the full year 2014, Union Pacific reported net income of $5.2 billion or $5.75 per diluted share. This compares to $4.4 billion or $4.71 per diluted share in 2013, 18 and 22 percent increases, respectively. Operating revenue totaled a record $24.0 billion versus $22.0 billion in 2013. Operating income totaled $8.8 billion, an 18 percent increase over 2013. In addition:
• Freight revenue increased to $22.6 billion, a 9 percent increase over 2013. Carloadings were up 7 percent versus 2013, with growth in each business group. Volume growth was led by agricultural products, industrial products, and intermodal.
• Average diesel fuel prices decreased 6 percent to $2.97 per gallon in 2014 from $3.15 per gallon in 2013.
• Union Pacific’s operating ratio of 63.5 percent was a full year record, improving 2.6 points from the previous record set in 2013.
• Train speed, as reported to the Association of American Railroads, was 24.0 mph, 8 percent slower compared to the full year 2013.
• Union Pacific’s capital program in 2014 totaled $4.1 billion, an increase of approximately $500 million compared to the full year 2013.
• The Company increased its quarterly declared dividend per share by 10 percent to $0.50 cents per share in the third quarter 2014. Total dividends declared for the full year 2014 grew 29 percent compared to the full year 2013.
• The Company repurchased more than 32.0 million shares in 2014 at an average share price of $100.65, and an aggregate cost of more than $3.2 billion.
2015 Outlook
“With 2014 behind us, we’re intently focused on the year ahead,” Koraleski said. “Overall, the U.S. economy continues to move forward at a moderate pace, but of course, there are always uncertainties. Clearly, one of the biggest uncertainties is the outlook for energy markets, which will bring both challenges and opportunities as we move ahead. We’re entering the year well-resourced and we’re looking forward to safely providing efficient, value-added service for our customers, and increasing returns for our shareholders in 2015.”