Railroad giant, Union Pacific has reported one of the company’s best third quarters in history with a net income of $904 million. In fact, this year Union Pacific set three all-time quarterly record: Diluted earnings per share reached $1.85, operating revenues totaled $5.1 billion and operating income totaled $1.6 billion.
In addition to the all-time high records, third quarter reports also highlighted several other key accomplishments: third quarter volumes, in terms of total revenue carloads, grew one percent since 2010; all six of the company’s business groups reported freight revenue growth with industrial products up 24%, automotive up 23%, energy up 12%, chemicals up 14%, agricultural up 9% and intermodal up 8%; and the Customer Satisfaction Index (91) was a new third quarter record.
Union Pacific officials could not be more happy with the company’s third quarter results. According to Jim Young, Union Pacific chairman and chief executive officer, Union Pacific’s outstanding third quarter, “clearly demonstrates how Union Pacific’s diverse franchise and value-added service offerings are driving record free cash flow and improved financial returns for our shareholders.” Young also stated, “As we have shown in this weaker economy, the diversity of our business continues to deliver record results. We remain confident in the strength of our fundamental strategy to enhance our franchise, provide increased value for our customers, and generate improved financial returns for our shareholders.”
Union Pacific’s third quarter successes were met despite a few negative influences. The report revealed that in Texas, operating efficiency was negatively effected and operating expenses increased by $18 million as result of severe heat and drought. Business was also made more difficult by diesel gas prices, which increased from $2.24 per gallon in 2010 to $3.18 per gallon in 2011. Also, weather related problems resulted in quarterly train speeds decreasing 4% from 2010.
Union Pacific’s third quarter results are a reflection of the success that freight transportation is having despite an uncertain U.S. economy. All types of freight showed increases this quarter and it seems that this growth is not a fluke. Freight railroads have been a staple of our economy for decades and will continue to be a growing industry for years to come.Posted in Freight Rail