Rail transportation provider Union Pacific Corp. (UNP) reported Thursday a profit for the first quarter that increased 11 percent from last year, reflecting improved freight revenues amid core pricing gains. Both earnings per share and quarterly revenues topped analysts' expectations.
"Union Pacific achieved record first quarter financial results, leveraging the strengths of our diverse franchise despite significantly weaker coal and grain markets," President and CEO Jack Koraleski said in a statement.
The Omaha, Nebraska-based 150-year-old operator of the largest railroad in North America reported net income of $957 million or $2.03 per share for the first quarter, higher than $863 million, or $1.79 per share in the prior-year quarter.
On average, 27 analysts polled by Thomson Reuters expected the company to report earnings of $1.96 per share for the first quarter. Analysts' estimates typically exclude special items.
Total operating revenues grew 3 percent to $5.29 billion from $5.11 billion in the same quarter last year, and topped twenty-one Wall Street analysts' consensus estimate of $5.22 billion.
Operating income for the quarter increased 8 percent to $1.63 billion from the prior-year quarter. Total operating expenses were $3.66 billion, up only 2 percent from the year-ago quarter, with fuel expenses declining 3 percent to $900 million from last year. However, Average diesel fuel price for the first quarter remained flat with last year at $3.23 per gallon.
The company had three of its six business groups reporting volume growth, and four reporting freight revenue growth.
Volume growth of automotive, chemicals, and intermodal shipments was partially offset by declines in shipments of coal, and agricultural products. Meanwhile, volumes for industrial products remained flat with last year, reflecting a reduction in hazardous waste shipments.
Business volumes, as measured by total revenue carloads, declined 2 percent from last year to 2.17 million carloads. However, freight revenues grew 3 percent on core pricing gains amid growth in four of the six business groups. Average revenue per car load also increased 6 percent to $2,299 from last year.
Operating ratio for the quarter improved 1.4 percentage points to 69.1 percent from last year. The company also reported a 1 point improvement in customer satisfaction index to 94 from last year.
The company noted that it efficiently managed its operations in the face of dynamic volume shifts across the network, and reported record first quarter operating ratio and customer satisfaction results.
"While there is still much uncertainty in the year ahead, our diverse franchise supports our continued focus on profitable growth and business development opportunities," Koraleski added.
In Thursday's regular trading session, UNP is currently trading at $141.18, up $4.24 or 3.10% on a volume of 0.59 million shares.
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