(Union Pacific issued the following news release on October 19.)
OMAHA — Union Pacific Corporation today reported third quarter 2006 net income of $420 million or $1.54 per diluted share. Last year’s third quarter net income was $369 million, or $1.38 per diluted share, which included a non-cash income tax expense reduction of $118 million after-tax, or $.44 per diluted share. Excluding the tax item, third quarter 2005 net income would have been $251 million or $.94 per diluted share. Comparing 2006 to 2005 results without the tax item, net income increased 67 percent and diluted earnings per share grew 64 percent. Operating income during the third quarter of 2006 was $752 million, up from $481 million reported in the third quarter of 2005.
“Quarterly operating revenue and income were the best ever in the history of the Railroad,” said Jim Young, President and Chief Executive Officer. “This quarter marks the sixth consecutive quarter of operating income growth. Unlike last year’s results, which were affected by hurricanes, this quarter we converted the demand for our services and greater operational efficiency into strong performance.”
2006 Third Quarter Summary
Operating revenue set an all-time quarterly record, growing 15 percent to $4.0 billion compared to $3.5 billion in the third quarter 2005. Five of six business teams achieved all-time record results in the quarter. The sixth business team, Automotive, posted its best third quarter ever.
Operating ratio improved 5.0 points versus the third quarter 2005 to 81.1 percent.
The Railroad’s average quarterly fuel price increased 21 percent from $1.88 per gallon in 2005 to $2.27 per gallon in the third quarter of 2006. The fuel surcharge recovered approximately 89 percent of the cost in excess of the Railroad’s $.75 per gallon base fuel price.
The Company’s fuel consumption rate, as measured by gallons per thousand gross ton-miles, was a best ever-quarterly rate of 1.26 versus 1.27 in the third quarter 2005.
While quarterly carload volume grew 3 percent, average terminal dwell, as reported to the Association of American Railroads, improved 7 percent year-over-year to 26.2 hours and average third quarter train speed decreased only slightly to 21.3 mph from 21.6 mph in 2005.
Union Pacific settled all insurance claims related to the 2005 January West Coast Storm, which reduced operating expense by $23 million in the third quarter 2006.
Third Quarter Railroad Commodity Revenue Summary versus 2005
–Agricultural up 19 percent
–Energy up 17 percent
–Industrial Products up 15 percent
–Chemicals and Intermodal each up 14 percent
–Automotive up 10 percent
Looking Forward
“We are optimistic about the fourth quarter,” Young said. “We anticipate that continued revenue growth and operational improvements will be converted into strong bottom line results.”