UP POSTS RECORD THIRD-QUARTER RESULTS
Union Pacific Corp., the major western Class I railroad, reported record net income for the third quarter of $437 million, a 63.7-percent increase over the third quarter of 2001.
The record income includes gains from a transaction with the Utah Transit Authority as well as a tax settlement. Excluding those items, UP's quarterly earnings are up 14 percent.
'Union Pacific combined record revenues with all-time productivity levels to produce great results,' said Dick Davidson, chairman and chief executive officer. 'We achieved double-digit growth in earnings per share for the fourth straight quarter.'
Excluding results from Overnite, its trucking subsidiary, UP also reported record operating income of $619 million, up 11.3 percent. Other quarterly records set were operating revenues, $2.85 million; commodity revenue, $2.73 billion, up 4 percent; operating margin, 21.7 percent; operating ratio, 78.3 percent, total revenue carloads, 2.36 million, and employee productivity.
Among commodities, all groups showed increases except energy, which was down 3 percent. Automotive revenue was up 13 percent, intermodal up 9 percent, agriculture and industrial products rose 4 percent and chemicals increased 2 percent.
The impact of the West Coast ports shutdown will be a factor in UP's fourth quarter. The railroad struggled when slowdowns at the ports wreaked havoc as UP faced congestion issues while trying to merge its operations with the former Southern Pacific.
'We have been facing some challenges in the wake of the port disruption,' Davidson said. 'Fortunately our strong rail franchise gives us the revenue diversity and network flexibility to rebound rapidly.
For the first nine months of 2002, net income rose 39 percent to $963 million, while operating income increased 16 percent to $1.7 billion. Year-to-year operating ratio for UP, excluding Overnite, decreased to 79.7 percent from 81.9 percent in 2001.