(The Union Pacific Corp. issued the following news release on April 24.)
OMAHA – Union Pacific Corporation today reported $.60 per diluted share in first quarter 2003 income before the cumulative effect of a change in accounting principle related to the adoption of FAS No. 143, “Accounting for Asset Retirement Obligations.” Net income was $1.67 per diluted share, or $429 million, including the $274 million after-tax cumulative effect adjustment. This compares to net income of $.86 per diluted share, or $222 million, in 2002.
“The high cost of fuel was the main driver behind our shortfall in earnings this quarter,” said Dick Davidson, chairman and chief executive officer. “Diesel fuel was up more than $.39 a gallon versus year-ago levels, costing us nearly $.30 per share. We also incurred a one-time expense for severance payments and March storms reduced coal revenues. Moving beyond fuel and weather, our operations are running smoothly and we are well positioned for future growth.”
First Quarter Highlights
Union Pacific Corporation, excluding Overnite Corporation, reported operating income of $368 million compared to $489 million for the same period in 2002.
* Operating Revenue was $2.7 billion, a first quarter record
* Average Commodity Revenue Per Car was at an all-time best of $1,188 per car
* Employee Productivity (gross ton-miles/employee) increased 3 percent for a first quarter record
First Quarter Railroad Commodity Revenue Summary versus 2002
* Industrial Products revenue was up 8 percent
* Automotive revenue was up 7 percent
* Intermodal and Chemicals were both up 2 percent
* Agricultural was up 1 percent
* Energy was down 4 percent
“I am encouraged by the revenue performance of our business groups especially in this difficult business environment. We achieved carload growth in four of the six business groups and revenue growth in five of the six. Our Industrial Products, Automotive and Intermodal teams each had record first quarter revenues,” Davidson said.
Overnite Corporation Operating Income Up 20 PercentOvernite Corporation reported a strong performance in the first quarter, with operating income of $12.6 million, compared with $10.5 million in 2002, an increase of 20 percent. Operating revenue increased 10 percent to an all-time best $341.2 million from $308.8 million last year. Overnite’s operating ratio decreased 0.3 percentage points to 96.3 percent compared to 2002’s ratio of 96.6 percent.
“Overnite certainly had a strong quarter,” said Davidson. “As Overnite continues to provide customers with consistent, on-time service, both freight volumes and operating income have grown.”
Looking Forward
“Looking ahead, we are focused on our yield strategy, our quality programs and our operational experience to make us a stronger company and position us to take advantage of the opportunities ahead,” Davidson said.
Union Pacific Corporation is 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. It 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 to serve all six gateways to Mexico, Union Pacific has the premier rail franchise in North America. The Corporation’s trucking operations include Overnite Corporation, which owns less-than-truckload carriers Overnite Transportation and Motor Cargo.