October 18, 2019 - TRA Newswire -
While Union Pacific Railroad (UP) posted a 7% overall decline in revenue for the third quarter of 2019, Kansas City Southern (KCS) did the exact opposite with a record 7% increase in revenue for the company.
“Kansas City Southern posted all-time record financial results in the third quarter 2019, including adjusted operating income growth of 15% and an adjusted operating ratio of 60.7%” in a news release from President and Chief Executive Officer Patrick J. Ottensmeyer. “These results are a testament to our employees’ hard work, and dedication to improving operational performance and customer service."
In Union Pacific's release, Lance Fritz, Chairman, President and CEO said that "given the challenging volume environment we delivered solid third quarter financial results, including an all-time best quarterly operating ratio. The work our employees are doing as part of Unified Plan 2020 is foundational to the company's success and I am confident there are additional improvement opportunities going forward for our customers and shareholders." UP reported 2019 third quarter net income of $1.6 billion, or $2.22 per diluted share. This compares to $1.6 billion, or $2.15 per diluted share, in the third quarter 2018.
KCS Third Quarter 2019 Results:
Record revenues of $747.7 million, an increase of 7% from prior year on flat volumes
Operating income of $282.0 million. Record adjusted operating income of $294.0 million up 15% over prior year, excluding restructuring charges related to Precision Scheduled Railroading (“PSR”) initiatives and a gain on insurance recoveries related to hurricane damage a year ago
Reported operating ratio of 62.3%. Adjusted operating ratio of 60.7%, compared to 63.4% in the prior year
Reported diluted earnings per share of $1.81. Record adjusted diluted earnings per share of $1.94, 24% higher than a year ago
Revenue growth for the third quarter of 2019 was led by a 21% increase in Chemicals and Petroleum due primarily to increased refined fuel products and liquid petroleum gas shipments to Mexico. Agriculture and Minerals revenues grew 15%, driven primarily by improved cycle times. Industrial and Consumer Products and Intermodal revenues also increased by 2% and 1%, respectively. These increases were partially offset by revenue declines in the remaining two commodity groups. Energy revenues declined by 11%, as increased Utility Coal shipments were more than offset by declines in Frac Sand and Crude Oil; Automotive revenues declined by 2%.
UP Third Quarter 2019 Results:
Quarterly freight revenue declined 7 percent, compared to third quarter 2018, as core pricing gains were offset by lower volumes, decreased fuel surcharge revenue and negative mix
Union Pacific's 59.5 percent operating ratio was an all-time best and improved 2.2 points, compared to Q3 2018.
The $2.09 per gallon average quarterly diesel fuel price in Q3 2019 was 12 percent lower than Q3 2018.
Freight car velocity was 213 daily miles per car, a 10 percent improvement compared to the third quarter 2018.
Terminal dwell was 23.4 hours, a 20 percent improvement compared to third quarter 2018.
The Company repurchased 6.4 million shares in the third quarter 2019 at an aggregate cost of $1.1 billion. Union Pacific also received 3.2 million shares to complete a $2.5 billion Accelerated Share Repurchase program initiated in February 2019.
Agricultural and industrial products were down 1 percent, premium freight down 9 percent and energy products were down 20%.
"We look forward to building on our Unified Plan 2020 successes as we provide a highly consistent and reliable service product for our customers," Fritz said. "We remain squarely focused on driving long-term shareholder value by appropriately investing in the railroad and returning excess cash to our shareholders.
While Union Pacific Railroad (UP) posted a 7% overall decline in revenue for the third quarter of 2019, Kansas City Southern (KCS) did the exact opposite with a record 7% increase in revenue for the company.
“Kansas City Southern posted all-time record financial results in the third quarter 2019, including adjusted operating income growth of 15% and an adjusted operating ratio of 60.7%” in a news release from President and Chief Executive Officer Patrick J. Ottensmeyer. “These results are a testament to our employees’ hard work, and dedication to improving operational performance and customer service."
In Union Pacific's release, Lance Fritz, Chairman, President and CEO said that "given the challenging volume environment we delivered solid third quarter financial results, including an all-time best quarterly operating ratio. The work our employees are doing as part of Unified Plan 2020 is foundational to the company's success and I am confident there are additional improvement opportunities going forward for our customers and shareholders." UP reported 2019 third quarter net income of $1.6 billion, or $2.22 per diluted share. This compares to $1.6 billion, or $2.15 per diluted share, in the third quarter 2018.
KCS Third Quarter 2019 Results:
Record revenues of $747.7 million, an increase of 7% from prior year on flat volumes
Operating income of $282.0 million. Record adjusted operating income of $294.0 million up 15% over prior year, excluding restructuring charges related to Precision Scheduled Railroading (“PSR”) initiatives and a gain on insurance recoveries related to hurricane damage a year ago
Reported operating ratio of 62.3%. Adjusted operating ratio of 60.7%, compared to 63.4% in the prior year
Reported diluted earnings per share of $1.81. Record adjusted diluted earnings per share of $1.94, 24% higher than a year ago
Revenue growth for the third quarter of 2019 was led by a 21% increase in Chemicals and Petroleum due primarily to increased refined fuel products and liquid petroleum gas shipments to Mexico. Agriculture and Minerals revenues grew 15%, driven primarily by improved cycle times. Industrial and Consumer Products and Intermodal revenues also increased by 2% and 1%, respectively. These increases were partially offset by revenue declines in the remaining two commodity groups. Energy revenues declined by 11%, as increased Utility Coal shipments were more than offset by declines in Frac Sand and Crude Oil; Automotive revenues declined by 2%.
UP Third Quarter 2019 Results:
Quarterly freight revenue declined 7 percent, compared to third quarter 2018, as core pricing gains were offset by lower volumes, decreased fuel surcharge revenue and negative mix
Union Pacific's 59.5 percent operating ratio was an all-time best and improved 2.2 points, compared to Q3 2018.
The $2.09 per gallon average quarterly diesel fuel price in Q3 2019 was 12 percent lower than Q3 2018.
Freight car velocity was 213 daily miles per car, a 10 percent improvement compared to the third quarter 2018.
Terminal dwell was 23.4 hours, a 20 percent improvement compared to third quarter 2018.
The Company repurchased 6.4 million shares in the third quarter 2019 at an aggregate cost of $1.1 billion. Union Pacific also received 3.2 million shares to complete a $2.5 billion Accelerated Share Repurchase program initiated in February 2019.
Agricultural and industrial products were down 1 percent, premium freight down 9 percent and energy products were down 20%.
"We look forward to building on our Unified Plan 2020 successes as we provide a highly consistent and reliable service product for our customers," Fritz said. "We remain squarely focused on driving long-term shareholder value by appropriately investing in the railroad and returning excess cash to our shareholders.