(Union Pacific Corp. issued the following news release on July 22.)
OMAHA, Neb. — Union Pacific Corporation today reported second quarter 2004 income from continuing operations of $158 million, or $.60 per diluted share. This compares to income from continuing operations of $275 million, or $1.05 per diluted share reported in the second quarter of 2003. Operating income during the second quarter of 2004 was $359 million, compared to $583 million in the second quarter of 2003.
“Our quarterly operating revenues topped the $3 billion mark for the first time ever in the history of the Railroad,” said Dick Davidson, chairman and chief executive officer. “In fact, this is the fourth consecutive quarter of record volumes. Despite these records, revenues could have been even stronger given this unprecedented level of demand. Although our service metrics have stabilized, we have not yet seen the operating improvement necessary to reduce costs or drive stronger revenue growth. In addition, record high fuel prices inflated costs. Because of these factors, we were unable to convert our record revenue to the bottom line.”
Second Quarter Overview
— Quarterly Operating Revenue topped $3 billion for the first time ever in the Railroad’s history
— Best quarter ever for Total Carloads and Average Revenue per Car
— Operating Margin decreased to 11.9 percent in the second quarter of 2004 from 20.1 percent in the second quarter of 2003
Second Quarter Railroad Commodity Revenue Summary versus 2003
— Chemicals up 9 percent
— Industrial Products up 8 percent
— Agricultural up 7 percent
— Intermodal up 6 percent
— Automotive up 2 percent
— Energy down 1 percent
Looking Forward
“We know we aren’t living up to the potential of this great company, but we remain absolutely focused on resolving the operational issues that have temporarily limited profitability,” Davidson said. “By year end, we will have graduated 5,000 trainmen, acquired nearly 750 locomotives on short- and long- term leases and taken steps to manage our business volumes. We believe these efforts will eventually allow us to catch up with the strong demand, improve network fluidity and operate more efficiently so that we can translate this demand into bottom-line results.”