(Source: Union Pacific press release, October 20, 2011)
OMAHA, Neb. — Union Pacific Corporation (NYSE: UNP) today reported 2011 third quarter net income of $904 million, or $1.85 per diluted share, compared to $778 million, or $1.56 per diluted share, in the third quarter 2010.
All-Time Quarterly Records
• Diluted earnings per share improved 19 percent to $1.85.
• Operating revenues totaled $5.1 billion, up 16 percent.
• Operating income totaled $1.6 billion, up 13 percent.
Union Pacific Corporation (NYSE: UNP) today reported 2011 third quarter net income of $904 million, or $1.85 per diluted share, compared to $778 million, or $1.56 per diluted share, in the third quarter 2010.
“Union Pacific delivered top and bottom line record results in the third quarter,” said Jim Young, Union Pacific chairman and chief executive officer. “We’re clearly demonstrating how Union Pacific’s diverse franchise and value-added service offerings are driving record free cash flow and improved financial returns for our shareholders.”
Third Quarter Summary
Third quarter business volumes, as measured by total revenue carloads, grew one percent versus 2010. Four of Union Pacific’s six business groups reported volume increases, including strong growth in automotive, industrial products, energy and chemical shipments. Agricultural products and intermodal volumes were down in the quarter compared to 2010. Quarterly operating revenue increased 16 percent in the third quarter 2011 to a record $5.1 billion versus $4.4 billion in the third quarter 2010. In addition:
• Each of Union Pacific’s six business groups reported freight revenue growth in the third quarter driven by increased fuel cost recoveries, core pricing gains and volume growth.
• Average quarterly diesel fuel prices increased 42 percent from $2.24 per gallon in the third quarter 2010 to $3.18 per gallon in the third quarter 2011.
• Union Pacific’s operating ratio of 69.1 percent was 0.9 points higher than the best-ever quarterly record achieved in the third quarter 2010. The impact of higher fuel prices negatively impacted the operating ratio by 1.7 points compared to 2010.
• Severe heat and extended drought conditions in Texas and the resulting damage to large sections of track structure negatively impacted operating efficiencies, driving operating expenses up by $18 million during the quarter.
• The Customer Satisfaction Index of 91 set a new third quarter record, one point better than the third quarter 2010.
• Quarterly train speed, as reported to the Association of American Railroads, was 24.6 mph, decreasing four percent compared to the third quarter 2010, mainly driven by weather-related challenges.
• The Company repurchased 4.7 million shares in the third quarter 2011 at an average share price of $91.45 and an aggregate cost of $428 million.
Summary of Third Quarter Freight Revenues
• Industrial Products up 24 percent
• Automotive up 23 percent
• Energy up 21 percent
• Chemicals up 14 percent
• Agricultural up 9 percent
• Intermodal up 8 percent
Outlook
“While the economic outlook is uncertain, we’re optimistic about the future for Union Pacific,” said Young. “As we have shown in this weaker economy, the diversity of our business continues to deliver record results. We remain confident in the strength of our fundamental strategy to enhance our franchise, provide increased value for our customers, and generate improved financial returns for our shareholders.”