Union Pacific Corp. said third-quarter net income was $1.7 billion, or $2.75 per diluted share, up from net income of $1.5 billion, or $2.51 per diluted share, for the same period in 2023.
“Our third quarter results demonstrate the success of our strategy,” said Union Pacific Chief Executive Jim Vena, in a release. “Improved safety and service performance supported solid revenue growth that we converted into double-digit improvement in third quarter operating income and earnings per share.
“The entire Union Pacific team is focused on delivering for our customers and shareholders, and is energized to build on these accomplishments to drive 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 grew 3% on increased volume and core pricing gains, partially offset by business mix and reduced fuel surcharge revenue.
Freight revenue excluding fuel surcharge revenue grew 5% as revenue carloads grew 6%.
The operating ratio, or operating expenses expressed as a percentage of revenues, a key indicator, was 60.3%, an improvement of 310 basis points. Lower quarterly fuel prices positively impacted the operating ratio by 120 basis points.
Operating income of $2.4 billion increased 11%.
Quarterly freight car velocity improved 5% to 210 daily miles per car. Locomotive productivity improved 5% to 135 gross ton-miles (GTMs) per horsepower day. Fuel consumption rate increased 1% to 1.058, measured in gallons of fuel per thousand GTMs.
Quarterly workforce productivity improved 12% to 1,102 car miles per employee. Year-to-date reportable personal injury and reportable derailment rates both improved.
Looking ahead, the company expects fourth quarter results to be consistent sequentially from the third quarter while improving year over year versus fourth quarter 2023. “Profitability will continue positive momentum with strong service product, improving network efficiency, and solid pricing,” the company said.
Union Pacific plans share repurchases of $1.5 billion in 2024. Pricing dollars will outpace inflation dollars, and long-term capital allocation strategy is unchanged with planned capital spending of $3.4 billion.
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