Union Pacific Q3 24 results: First look
Largest US railroad company increases freight volume and revenue
Union Pacific Corp. announced that third quarter net income was $1.7 billion, or $2.75 per diluted share, an increase from net income of $1.5 billion, or $2.51 per diluted share, in the same period of 2023.
"Our third quarter results demonstrate the success of our strategy," Union Pacific CEO Jim Vena said in a press release. "Improved safety and service performance supported solid revenue growth, which we were able to translate into double-digit improvement in operating income and earnings per share in the third quarter."
"The entire Union Pacific team is focused on meeting the expectations of our customers and shareholders and is energized to build on these successes to achieve sustainable long-term success."
The Omaha-based company (NYSE: UNP) and operator of the largest U.S. railroad said operating revenue of $6.1 billion increased 3%, driven by volume increases and higher core pricing, partially offset by business mix and lower fuel surcharge revenue.
Freight revenue excluding fuel surcharges increased by 5%, while carloads sold increased by 6%.
The operating ratio, i.e. operating costs as a percentage of revenue, an important indicator, was 60.3%, an improvement of 310 basis points. Lower fuel prices in the quarter had a positive effect on the operating ratio, namely by 120 basis points.
Operating profit increased by 11% to USD 2.4 billion.
Quarterly freight car speed increased by 5% to 210 miles per day per car. Locomotive productivity increased by 5% to 135 gross ton miles (GTM) per horsepower day. Fuel consumption increased by 1% to 1.058 gallons of fuel per thousand GTM.
The quarterly productivity of the workforce rose by 12% to 1,102 car miles per employee. Both the year-to-date reportable personal injury and reportable derailment rates improved.
Looking ahead, the company expects fourth quarter results to be in line with the third quarter and to improve year-on-year compared to the fourth quarter of 2023. "Profitability will continue its positive momentum thanks to strong service products, improved network efficiency and solid pricing," the company said.
Union Pacific plans $1.5 billion in share repurchases in 2024, pricing will outpace inflation and the long-term capital allocation strategy remains unchanged with $3.4 billion of planned investments.
