Union Pacific posts Q3 records for income, operating ratio

Union Pacific Corp. today reported third-quarter 2021 net income of $1.7 billion, or $2.57 per diluted share, compared with $1.4 billion, or $2.01 per diluted share, in the third quarter 2020.

Operating revenue for the quarter rose 13% to $5.6 billion, while operating income climbed 20% to $2.4 billon compared with the same period a year ago.

The Class I's business volumes, as measured by total revenue carloads, were flat.

UP posted an operating ratio (OR) of 56.3% for the quarter, compared to 58.7% a year ago. Higher fuel prices negatively impacted the OR by 140 points.

Operating income, OR, net income and earnings per share were third-quarter records for the company, UP officials said in a press release.

Also during the quarter compared to a year ago:
• Network operations were challenged by wildfires and other weather events, reflected in quarterly freight car velocity of 195 daily miles per car, a 13% decline.
• Quarterly locomotive productivity was 127 gross ton-miles (GTMs) per horsepower day, an 8% decline.
• Quarterly workforce productivity was 1,044 car miles per employee, a 5% improvement.
• Average maximum train length was 9,359 feet, a 4% increase.
• Fuel consumption rate, measured in gallons of fuel per thousand GTMs, improved 1%.
• UP’s year-to-date reportable personal injury rate deteriorated to 1.0 per 200,000 employee-hours compared to 0.9 for year-to-date 2020.

"The Union Pacific team successfully navigated global supply chain disruptions, a major bridge outage, and additional weather events to produce strong quarterly revenue growth and financial results," said Chairman, President and CEO Lance Fritz. "In the quarter, the team delivered solid core pricing gains, leveraged business development to produce a positive business mix, and generated productivity to offset flat volume."

UP set a quarterly record for fuel consumption rate, as the company advances toward its goal to reduce its absolute greenhouse gas emissions, Fritz said.

"As we close out 2021, we are committed to improving our safety performance and service product to support our customers and the broader supply chain to handle the strong demand for freight transportation," he added.