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Just as it has for other Class Is, rising fuel costs affected Union Pacific Railroad's first-quarter earnings. On April 24, UP reported quarterly operating income of $368 million and operating expenses of $2.69 billion compared with $489 million and $2.47 billion, respectively, for the same 2002 period.


The Class I's quarterly operating ratio of 86.5 worsened 4.9 points compared with first-quarter 2002.


"Diesel fuel was up more than 39 cents a gallon vs. year-ago levels, costing us nearly 30 cents per share," said UP Chairman and Chief Executive Officer Dick Davidson in a prepared statement. "We also incurred a one-time expense for severance payments and March storms reduced coal revenues."


However, UP posted a quarterly record $2.7 billion in operating revenue, a 3 percent increase compared with a similar 2002 period.


"We achieved carload growth in four of the six business groups and revenue
growth in five of the six," said Davidson. "Our industrial products, automotive and intermodal teams each had record first-quarter revenues."