UP touts Q1 results, operating performance

Union Pacific Corp. today announced a 6 percent increase in net income during the first quarter, despite dealing with severe flooding and a 2 percent decline in business volumes.

The Class I posted Q1 2019 net income of $1.4 billion, or $1.93 per diluted share, compared with $1.3 billion, or $1.68 per diluted share, in the same period a year ago, according to a UP press release.

UP also reported Q1 operating income of $2 billion, up 1 percent; total revenue of $5.4 billion, down 2 percent; and operating expenses of $3.4 billion, down 3 percent. UP's operating ratio for the quarter was 63.6 percent, a 1 point improvement from Q1 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."

Business volumes in the quarter, as measured by total carloads, declined 2 percent compared to 2018. Volume increases in industrial (up 5 percent) and premium (up 3 percent) were more than offset by declines in energy (down 16 percent) and agricultural products (down 3 percent), UP officials said.

In addition, UP reported:
• quarterly freight revenue declined 2 percent, as increased fuel surcharge revenue and core pricing gains were offset by lower volumes and negative mix;
• a $2.07 per gallon average quarterly diesel fuel price in Q1 2019 was 3 percent lower than in the previous year's quarter; and
• quarterly freight-car velocity was 185 daily miles per car, a 7 percent improvement versus a year ago.

As for the 2019 outlook, Fritz said: "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."