(Union Pacific issued the following on January 22, 2009.)
OMAHA, Neb. — Union Pacific Corporation (NYSE: UNP) today reported 2008 fourth quarter net income of $661 million, or $1.31 per diluted share, a 35 percent increase compared to $491 million, or $0.93 per diluted share for the fourth quarter of 2007. The company posted quarterly operating revenues of $4.3 billion in 2008 versus $4.2 billion in the fourth quarter 2007.
Fourth Quarter 2008 Highlights
* Diluted earnings per share improved 41 percent to $1.31.
* Operating revenues totaled $4.3 billion, up two percent.
* Operating income grew 32 percent to $1.14 billion.
* Operating ratio was 73.4 percent, a 6 point improvement.
* Net income increased 35 percent to $661 million.
* Customer Satisfaction Index increased 7 points to 85.
Full Year 2008 Highlights
* Diluted earnings per share improved 31 percent to $4.54.
* Operating revenues totaled $18.0 billion, up 10 percent.
* Operating income grew 21 percent to $4.1 billion.
* Operating ratio was 77.3 percent, a 2 point improvement.
* Net income increased 26 percent to $2.3 billion.
* Return on invested capital grew 1.5 points to 10.2 percent.
* Customer Satisfaction Index increased four points to 83.
“Union Pacific posted solid earnings for the quarter and the year, despite numerous challenges,” said Jim Young, Union Pacific chairman and chief executive officer. “We increased profitability by operating a safe and efficient railroad that delivered excellent service and value for our customers. In the fourth quarter, our operating ratio improved significantly as we benefited from lower fuel costs, better pricing, and productivity gains, all of which helped offset the impact of declining volumes in this difficult economic environment.”
Fourth Quarter Summary
Although business volumes declined in the quarter, Union Pacific reported operating income of $1.1 billion in the fourth quarter 2008, a 32 percent year-over-year improvement driven by lower fuel costs, continued pricing gains and strong productivity. The company’s freight revenues grew two percent in the quarter to $4.1 billion. In addition:
* The company’s fourth quarter 2008 Customer Satisfaction Index improved seven points to 85, an all-time company high.
* Fourth quarter 2008 average quarterly fuel price declined six percent to $2.46 per gallon, compared to $2.62 per gallon in the fourth quarter 2007.
* Business volumes, as measured by total revenue carloads, were 12 percent lower in 2008 than in the fourth quarter 2007.
* Union Pacific’s operating ratio improved six points to 73.4 percent in the fourth quarter 2008.
Summary of Fourth Quarter Freight Revenues
* Energy was up 20 percent.
* Agricultural was up 10 percent.
* Chemicals were down 1 percent.
* Industrial Products were down 3 percent.
* Intermodal was down 7 percent.
* Automotive was down 17 percent.
2008 Full Year Summary
For the full year 2008, Union Pacific reported net income of $2.3 billion, or $4.54 per diluted share, compared to $1.9 billion, or $3.46 per diluted share in 2007. The company posted operating revenues of $18.0 billion in 2008 compared to $16.3 billion in 2007. Operating income increased to $4.1 billion, a 21 percent improvement over 2007.
* Freight revenues grew 11 percent to $17.1 billion.
* Average fuel price per gallon increased 39 percent to $3.15 from $2.27.
* Business volumes were down five percent.
Outlook
“Although we expect 2009 will be a difficult year for our Company, our customers and our employees, we are challenging ourselves to deliver an even higher level of performance,” Young said. “In this tough economic environment, we remain dedicated to providing excellent service to our customers, making strategic investments for long-term growth and producing strong financial returns.”
About Union Pacific
Union Pacific Corporation owns one of America’s leading transportation companies. Its principal operating company, Union Pacific Railroad, links 23 states in the western two-thirds of the country and serves the fastest-growing U.S. population centers. Union Pacific’s diversified business mix includes Agricultural Products, Automotive, Chemicals, Energy, Industrial Products and Intermodal. The railroad offers competitive long-haul routes from all major West Coast and Gulf Coast ports to eastern gateways. Union Pacific connects with Canada’s rail systems and is the only railroad serving all six major gateways to Mexico, making it North America’s premier rail franchise.