Union Pacific 3rd Quarter Down 9% earnings & 11% Income
October 20th, 2016
October 20, 2016 - TRA Newswire -
Union Pacific Corporation (NYSE: UNP) today reported 2016 third quarter net income of $1.1 billion, or $1.36 per diluted share compared to $1.3 billion, or $1.50 per diluted share, in the third quarter 2015.
Third Quarter Results
Diluted earnings per share of $1.36 declined 9 percent.
Operating income totaled $2.0 billion, down 11 percent.
Operating ratio of 62.1 percent, up 1.8 points.
"Continued momentum from our productivity initiatives, as well as positive core pricing, helped partially offset the decline in total carload volumes. While many of the same volume challenges have continued throughout the year, we are keeping a laser focus on our six value tracks. This strategy ensures we provide our customers with an excellent value proposition and service experience, while efficiently and safely managing our resources," said Lance Fritz, Union Pacific chairman, president and chief executive officer.
Third Quarter Summary
Operating revenue of nearly $5.2 billion was down 7 percent in the third quarter 2016 compared to the third quarter 2015. Third quarter business volumes, as measured by total revenue carloads, declined 6 percent compared to 2015. While shipments of agricultural products grew 11 percent, volumes declined in the remaining five business groups. In addition:
Quarterly freight revenue decreased 7 percent compared to the third quarter 2015, as volume declines and lower fuel surcharge revenue more than offset core pricing gains.
Union Pacific's 62.1 percent operating ratio was unfavorable by 1.8 points compared to the record third quarter 2015, but improved 3.1 points sequentially.
The $1.57 per gallon average quarterly diesel fuel price in the third quarter 2016 was 13 percent lower than the third quarter 2015.
Quarterly train speed, as reported to the Association of American Railroads, was 26.0 mph, 2 percent faster than the third quarter 2015.
The Company repurchased 9 million shares in the third quarter 2016 at an aggregate cost of $851 million.
Summary of Third Quarter Freight Revenues
Agricultural Products up 6 percent
Chemicals down 1 percent
Automotive down 8 percent
Intermodal down 9 percent
Industrial Products down 13 percent
Coal down 19 percent
2016 Outlook
"The macroeconomic environment still has its challenges - an unstable global economy, the relatively strong U.S. dollar, and continued soft demand for consumer goods. However, certain segments of the economy, such as grain and energy, are showing signs of life," Fritz said. "Closing out 2016 and heading into next year, we are optimistic about the opportunities that lie ahead. In the coming months we will continue to do what Union Pacific does best - operate a safe, efficient, and productive network while providing an excellent customer experience and delivering solid shareholder returns."
Union Pacific Corporation (NYSE: UNP) today reported 2016 third quarter net income of $1.1 billion, or $1.36 per diluted share compared to $1.3 billion, or $1.50 per diluted share, in the third quarter 2015.
Third Quarter Results
Diluted earnings per share of $1.36 declined 9 percent.
Operating income totaled $2.0 billion, down 11 percent.
Operating ratio of 62.1 percent, up 1.8 points.
"Continued momentum from our productivity initiatives, as well as positive core pricing, helped partially offset the decline in total carload volumes. While many of the same volume challenges have continued throughout the year, we are keeping a laser focus on our six value tracks. This strategy ensures we provide our customers with an excellent value proposition and service experience, while efficiently and safely managing our resources," said Lance Fritz, Union Pacific chairman, president and chief executive officer.
Third Quarter Summary
Operating revenue of nearly $5.2 billion was down 7 percent in the third quarter 2016 compared to the third quarter 2015. Third quarter business volumes, as measured by total revenue carloads, declined 6 percent compared to 2015. While shipments of agricultural products grew 11 percent, volumes declined in the remaining five business groups. In addition:
Quarterly freight revenue decreased 7 percent compared to the third quarter 2015, as volume declines and lower fuel surcharge revenue more than offset core pricing gains.
Union Pacific's 62.1 percent operating ratio was unfavorable by 1.8 points compared to the record third quarter 2015, but improved 3.1 points sequentially.
The $1.57 per gallon average quarterly diesel fuel price in the third quarter 2016 was 13 percent lower than the third quarter 2015.
Quarterly train speed, as reported to the Association of American Railroads, was 26.0 mph, 2 percent faster than the third quarter 2015.
The Company repurchased 9 million shares in the third quarter 2016 at an aggregate cost of $851 million.
Summary of Third Quarter Freight Revenues
Agricultural Products up 6 percent
Chemicals down 1 percent
Automotive down 8 percent
Intermodal down 9 percent
Industrial Products down 13 percent
Coal down 19 percent
2016 Outlook
"The macroeconomic environment still has its challenges - an unstable global economy, the relatively strong U.S. dollar, and continued soft demand for consumer goods. However, certain segments of the economy, such as grain and energy, are showing signs of life," Fritz said. "Closing out 2016 and heading into next year, we are optimistic about the opportunities that lie ahead. In the coming months we will continue to do what Union Pacific does best - operate a safe, efficient, and productive network while providing an excellent customer experience and delivering solid shareholder returns."