Union Pacific Corporation shares were up this week as the company reported 2019 first quarter net income of $1.4 billion, or $1.93 per diluted share. This compares to $1.3 billion, or $1.68 per diluted share, in the first quarter 2018.
"We delivered record first quarter financial results driven by improved operating performance, while dealing with significant weather challenges," said Lance Fritz, Union Pacific chairman, president and chief executive officer. "Unified Plan 2020 created a more resilient and robust network, allowing us to quickly return to normal operations."
First Quarter Summary
Operating revenue of $5.4 billion was down 2 percent in the first quarter 2019 compared to the first quarter 2018. First quarter business volumes, as measured by total revenue carloads, decreased 2 percent compared to 2018. Volume increases in industrial and premium were more than offset by declines in energy and agricultural products. In addition:
- Quarterly freight revenue declined 2 percent compared to the first quarter 2018, as increased fuel surcharge revenue and core pricing gains were offset by lower volumes and negative mix.
- Union Pacific’s 63.6 percent operating ratio improved 1.0 point compared to the first quarter 2018.
- The $2.07 per gallon average quarterly diesel fuel price in the first quarter 2019 was 3 percent lower than the first quarter 2018.
- Union Pacific recognized a payroll tax refund of $42 million, along with associated interest income of $27 million in the first quarter 2019.
- Quarterly freight car velocity was 185 daily miles per car, a 7 percent improvement compared to the first quarter 2018.
- Union Pacific’s reportable personal injury rate was 0.90 per 200,000 employee-hours, compared to 0.74 in the first quarter 2018.
- The Company repurchased 18.1 million shares in the first quarter 2019 at an aggregate cost of $3.5 billion.
Summary of First Quarter Freight Revenues
- Energy down 16 percent
- Agricultural Products down 3 percent
- Premium up 3 percent
- Industrial up 5 percent
2019 Outlook
"We look to build on the momentum we had prior to the weather challenges and provide a consistent, reliable service product for our customers, while at the same time improving our operating efficiency," Fritz said. "We remain focused on increasing shareholder returns through appropriate capital investments and returning excess cash to shareholders."