Union Pacific Corporation (NYSE: UNP) today reported 2018 third quarter net income of $1.6 billion, or a third quarter record $2.15 per diluted share. This compares to $1.2 billion, or $1.50 per diluted share, in the third quarter 2017.
Third Quarter Results
Diluted earnings per share of $2.15 increased 43 percent. Operating income totaled $2.3 billion, up 9 percent. Operating ratio of 61.7 percent, flat with third quarter 2017 (see footnote).
"While we reported solid financial results, we did not make the service and productivity gains that we expected during the quarter. However, we are making progress implementing our new Unified Plan 2020 and we are well positioned to drive improvement going forward," said Lance Fritz, Union Pacific chairman, president and chief executive officer. "I am confident we have the right people and plans in place to improve our operations, provide more reliable service for our customers, and achieve industry-leading financial performance." Third Quarter Summary Operating revenue of $5.9 billion was up 10 percent in the third quarter 2018 compared to the third quarter 2017. Third quarter carloads increased 6 percent compared to 2017. Volume increases in industrial, premium, and agricultural products more than offset declines in energy. In addition:
Quarterly freight revenue improved 10 percent compared to the third quarter 2017, as volume growth, higher fuel surcharge revenue, and core pricing gains were partially offset by negative mix of traffic. Union Pacific's 61.7 percent operating ratio was flat (see footnote) compared to the third quarter 2017. The $2.38 per gallon average quarterly diesel fuel price in the third quarter 2018 was 34 percent higher than the third quarter 2017. Quarterly train speed, as reported to the Association of American Railroads, was 24.0 mph, 6 percent slower than the third quarter 2017. Union Pacific's year-to-date reportable personal injury rate of 0.77 per 200,000 employee hours improved 1 percent compared to the year-to-date rate achieved in 2017. The Company repurchased 2.2 million shares in the third quarter 2018.
Summary of Third Quarter Freight Revenues
Energy up 1 percent Agricultural Products up 6 percent Industrial up 13 percent Premium up 18 percent
Outlook "Looking ahead, I am confident that the recent progress we have made on our Unified Plan 2020 will accelerate in the near term. As we move forward with its implementation, along with other G55 + 0 initiatives, we will regain our productivity momentum and improve the value proposition for all of our stakeholders," Fritz said.
Footnote 1: Certain prior period amounts have been adjusted for the retrospective adoption of Accounting Standard Update 2017-07 related to the presentation of the components of net periodic pension and other postretirement benefit costs.