UP posts higher operating revenue, earnings in Q1

Union Pacific Corp. today reported first-quarter 2023 net income of $1.6 billion, or $2.67 in earnings per diluted share, compared with $1.6 billion, or $2.57 per share, in the same period a year ago.

The Q1 2023 results include $107 million in other income from a one-time real estate transaction. Operating revenue climbed 3% to $6.1 billion, driven by higher fuel surcharge revenue and core pricing gains, partially offset by a negative business mix and volume declines, UP officials said in a press release.

"We delivered greater network fluidity and resiliency in the first quarter even as we faced a series of significant weather events," said Chairman, President and CEO Lance Fritz. "In addition to the impact of weather on carload volumes and costs, higher inflation also reduced our operating income and more than offset our record first quarter operating revenue."

Measured by total revenue carloads, business volumes declined 1% in the quarter. UP posted an operating ratio of 62.1% compared with 59.4% a year ago.

Also during Q1:

• Freight car velocity declined 1% to 196 daily miles per car;

• Locomotive productivity dropped 5% to 123 gross ton-miles (GTMs) per horsepower day;

• Maximum train length of 9,159 feet was flat;

• Workforce productivity decreased 6% to 991 car miles per employee;

• Fuel consumption rate of 1.123 deteriorated 1%, measured in gallons of fuel per thousand GTMs; and

• UP's reportable derailment rate improved 10% to 2.21 per million train miles compared to 2.46 for 2022.

The company is maintaining its 2023 full-year guidance.

"Despite a continued challenging environment, our strengthening service product, bolstered by a strong pipeline of new employees, gives us confidence we can capture available demand and improve efficiency [for] the remainder of the year," Fritz said.