January 25, 2024 - TRA Newswire -

• Union Pacific's fourth quarter and 2023 financials in a nutshell:

Earnings per diluted share of $2.71 were up 1% while the full year earnings (per diluted share of $10.45) were down 7%.

4th quarter net income was up 1% but that could not offset the full year net income being down 9 percent. Net income dipped from $1.8 billion in 2022 to $1.7 billion in 2023.

“The team continues to execute our multi-year strategy to be the industry's best in safety, service, and operational excellence,” said Jim Vena, Union Pacific Chief Executive Officer. “Our fourth quarter results show much of what's possible at Union Pacific and that we're on the right path to reaching our goals. Service and operational metrics showed great improvement in the quarter. Those improvements propel us toward a service product that supports growth with our customers. We enter 2024 with strong momentum, recognizing we have plenty of opportunity to improve. We're excited to show our stakeholders what our great team can accomplish.”

Operating revenue of $24.1 billion was down 3% driven by lower fuel surcharge revenue, business mix, and volume declines partially offset by core pricing gains.

Revenue carloads declined 1% in 2023 while freight car velocity showed a 7% improvement. Workforce productivity, expressed in 1,000 car miles per employee, declined 3%. 

The 2024 outlook looks to be muted with a dip in intermodal business, according to UP, as well as lower coal demand and soft economic conditions. The capital plan of $3.4 billion will stay in place for 2024 and the company will not repurchase any shares in the first quarter of 2024. The company repurchased 3.5 million shares in 2023 at an aggregate cost of $712 million.

• BNSF Railway will spend nearly $4 billion on capex in 2024

BNSF Railway Company (BNSF) announced its 2024 capital investment plan of $3.92 billion. 

“This year’s capital plan reflects our continued commitment to growth, by ensuring we have the capacity and equipment needed to support our customers,” said Katie Farmer, President and CEO. “We continue to invest in our network to ensure we run our railroad as safely and efficiently as possible, while building upon the strong service our customers expect.”

The largest component of this year’s capital plan, $2.88 billion, is devoted to maintaining BNSF’s core network and related assets, according to the company. "Investing in BNSF’s existing infrastructure ensures the railroad is in top condition, which results in less unscheduled service outages that can slow down the rail network and reduce capacity."

Maintenance projects include replacing and upgrading rail, track infrastructure like ballast and rail ties, and maintaining rolling stock. It will consist of nearly 13,000 miles of track surfacing and/or undercutting work and the replacement of 365 miles of rail and approximately 2.8 million rail ties. Approximately $440 million of this year’s capital plan is for equipment acquisitions.

Just under $600 million of this year’s capital plan will be for expansion and efficiency projects, adding to the nearly $2.6 billion invested in expansion projects over the past five years. 

On its Southern Transcon route between the West Coast and the Midwest, BNSF will support traffic growth by completing two multi-year projects that will increase capacity throughout the corridor. These include the addition of several segments of new track in Eastern Kansas and terminal and fueling improvements near Belen, New Mexico. In Illinois, BNSF will continue multi-year intermodal facility expansion projects in Chicago (Cicero). In California, BNSF will continue property acquisitions and development activities for the planned Barstow International Gateway project and complete a multi-year track efficiency improvement project in San Bernardino.