April 18, 2019 - TRA Newswire -
Despite severe weather challenges across most of its Western network and a switch over to Precision Scheduled Railroading, Union Pacific today reported a record first quarter which saw earnings per share rise 15% on an operating ratio of 63.6%, an improvement of 1 point. Operating income totaled $2.0 billion, up 1 per cent. Net income registered $1.4 billion compared to $1.3 billion in the first quarter of 2018.
"We delivered record first quarter financial results driven by improved operating performance, while dealing with significant weather challenges," said Lance Fritz, Union Pacific chairman, president and chief executive officer. "Unified Plan 2020 created a more resilient and robust network, allowing us to quickly return to normal operations."
Chief Operating Officer Jim Vena, who came to Union Pacific this past January after a 40-year career at Canadian National (CN), has been overseeing the implementation of Precision Scheduled Railroading. PSR is a system pioneered by former CN CEO Hunter Harrison and adopted by Union Pacific late last year.
The railroad has already mothballed over 800 locomotives and over 20,000 railcars since late 2018. The time that the average railcar sits in a classification yard to be switched fell by 18 percent in the last quarter of 2018, according to the Association of American Railroads.
First Quarter Summary
Operating revenue of $5.4 billion was down 2 percent in the first quarter 2019 compared to the first quarter 2018. First quarter business volumes, as measured by total revenue carloads, decreased 2 percent compared to 2018. Volume increases in industrial and premium were more than offset by declines in energy and agricultural products. In addition:
Quarterly freight revenue declined 2 percent compared to the first quarter 2018, as increased fuel surcharge revenue and core pricing gains were offset by lower volumes and negative mix.
Union Pacific's 63.6 percent operating ratio improved 1.0 point compared to the first quarter 2018.
The $2.07 per gallon average quarterly diesel fuel price in the first quarter 2019 was 3 percent lower than the first quarter 2018.
Union Pacific recognized a payroll tax refund of $42 million, along with associated interest income of $27 million in the first quarter 2019.
Quarterly freight car velocity was 185 daily miles per car, a 7 percent improvement compared to the first quarter 2018.
Union Pacific's reportable personal injury rate was 0.90 per 200,000 employee-hours, compared to 0.74 in the first quarter 2018.
The Company repurchased 18.1 million shares in the first quarter 2019 at an aggregate cost of $3.5 billion.
Summary of First Quarter Freight Revenues
Energy down 16 percent
Agricultural Products down 3 percent
Premium up 3 percent
Industrial up 5 percent
2019 Outlook
"We look to build on the momentum we had prior to the weather challenges and provide a consistent, reliable service product for our customers, while at the same time improving our operating efficiency," Fritz said. "We remain focused on increasing shareholder returns through appropriate capital investments and returning excess cash to shareholders."
Despite severe weather challenges across most of its Western network and a switch over to Precision Scheduled Railroading, Union Pacific today reported a record first quarter which saw earnings per share rise 15% on an operating ratio of 63.6%, an improvement of 1 point. Operating income totaled $2.0 billion, up 1 per cent. Net income registered $1.4 billion compared to $1.3 billion in the first quarter of 2018.
"We delivered record first quarter financial results driven by improved operating performance, while dealing with significant weather challenges," said Lance Fritz, Union Pacific chairman, president and chief executive officer. "Unified Plan 2020 created a more resilient and robust network, allowing us to quickly return to normal operations."
Chief Operating Officer Jim Vena, who came to Union Pacific this past January after a 40-year career at Canadian National (CN), has been overseeing the implementation of Precision Scheduled Railroading. PSR is a system pioneered by former CN CEO Hunter Harrison and adopted by Union Pacific late last year.
The railroad has already mothballed over 800 locomotives and over 20,000 railcars since late 2018. The time that the average railcar sits in a classification yard to be switched fell by 18 percent in the last quarter of 2018, according to the Association of American Railroads.
First Quarter Summary
Operating revenue of $5.4 billion was down 2 percent in the first quarter 2019 compared to the first quarter 2018. First quarter business volumes, as measured by total revenue carloads, decreased 2 percent compared to 2018. Volume increases in industrial and premium were more than offset by declines in energy and agricultural products. In addition:
Quarterly freight revenue declined 2 percent compared to the first quarter 2018, as increased fuel surcharge revenue and core pricing gains were offset by lower volumes and negative mix.
Union Pacific's 63.6 percent operating ratio improved 1.0 point compared to the first quarter 2018.
The $2.07 per gallon average quarterly diesel fuel price in the first quarter 2019 was 3 percent lower than the first quarter 2018.
Union Pacific recognized a payroll tax refund of $42 million, along with associated interest income of $27 million in the first quarter 2019.
Quarterly freight car velocity was 185 daily miles per car, a 7 percent improvement compared to the first quarter 2018.
Union Pacific's reportable personal injury rate was 0.90 per 200,000 employee-hours, compared to 0.74 in the first quarter 2018.
The Company repurchased 18.1 million shares in the first quarter 2019 at an aggregate cost of $3.5 billion.
Summary of First Quarter Freight Revenues
Energy down 16 percent
Agricultural Products down 3 percent
Premium up 3 percent
Industrial up 5 percent
2019 Outlook
"We look to build on the momentum we had prior to the weather challenges and provide a consistent, reliable service product for our customers, while at the same time improving our operating efficiency," Fritz said. "We remain focused on increasing shareholder returns through appropriate capital investments and returning excess cash to shareholders."