Union Pacific posts higher revenue, profit in Q4

Union Pacific Corp. today reported fourth-quarter 2021 net income of $1.7 billion, or $2.66 per diluted share, up from net income of $1.6 billion, or $2.36 per diluted share, in the same quarter in 2020.

The 2020 adjusted results exclude a $278 million pre-tax, non-cash impairment charge.

For Q4 2021, UP posted operating revenue of $5.7 billion, a 12% increase driven by higher fuel surcharge revenue, a positive business mix and core pricing gains, partially offset by lower volumes.

Volume, as measured by total revenue carloads, was down 4%. The Class I’s operating ratio for the quarter came in at 57.2% compared with 61% in Q4 2020.

Operating income rose 7% to $2.4 billion and the company repurchased 5.8 million shares in the quarter at an aggregate cost of $1.4 billion.

Reported net income for full-year 2021 was $6.5 billion, or $9.95 per diluted share. The full-year results compare to adjusted full-year 2020 net income of $5.6 billion, or $8.19 per diluted share, which excludes the impairment charge. The full-year operating ratio of 57.2% improved 130 basis points.

"The Union Pacific team concluded its most profitable year ever in 2021. We produced double-digit fourth quarter revenue growth by leveraging our great rail franchise to generate positive business mix and core pricing gains, despite ongoing global supply chain challenges that impacted volumes," said UP Chairman, President and Chief Executive Officer Lance Fritz in a press release.

The Class I improved its fuel consumption rate for the third consecutive year, which helped reduce the company’s carbon footprint and meet the goals of its 2021 Climate Action Plan, Fritz said.

"While our safety and operational performance in 2021 did not meet expectations, we look to convert recent progress into sustained improvement in 2022," he added. "Although uncertainty remains around COVID variants and supply chain disruptions, we see a positive demand environment in 2022 and continued traction from business development efforts driving growth as we deliver value to all our stakeholders."