Union Pacific’s net profit for the second quarter of 2021 rose by 59% from a year ago to $1.8 billion amid a 30% increase in operating revenue.
Second-quarter net income was $1.8 billion, or $2.72 per diluted share, compared with $1.1 billion, or $1.67 per diluted share, in the second quarter of 2020.
Operating revenues were $5.5 billion, a 30% increase from the second quarter of 2020. Revenues were higher across all of UP’s (NYSE: UNP) segments as volumes improved from the second quarter of 2020 and the start of the COVID-19 pandemic in the U.S.
Meanwhile, operating expenses rose 17% in the quarter to $3 billion amid higher fuel costs and compensation and benefits costs.
Operating income was nearly $2.5 billion, a 50% gain year-over-year. Operating ratio was 55.1% in the second quarter, compared with 61% for the same period a year ago. Investors sometimes use operating ratio to gauge the financial health of a company, with a lower OR implying improved health.
“The Union Pacific team leveraged volume growth, core pricing gains and productivity to produce record quarterly results,” UP President and CEO Lance Fritz said in a release. “Beyond our strong financial performance, we also made progress on our goal to reduce our carbon footprint, which includes a 3% improvement in our fuel consumption rate.
“Importantly, these strong results were achieved in a challenging environment as our rail network continues to be impacted by supply chain disruptions, particularly in the intermodal space. As we move into the second half of 2021, we will continue working with our customers and the broader supply chain to increase fluidity and efficiently handle the strong demand for freight transportation,” Fritz said.
Subscribe to FreightWaves’ e-newsletters and get the latest insights on freight right in your inbox.
Click here for more FreightWaves articles by Joanna Marsh.