Union Pacific Corporation (NYSE: UNP) today reported 2020 third quarter net income of $1.4 billion, or $2.01 per diluted share. This compares to $1.6 billion, or $2.22 per diluted share, in the third quarter 2019.
“Our third quarter results represent another step in our company’s transformation. We demonstrated our ability to efficiently adjust to a sharp rebound in volume, which increased 19% from the second quarter, while operating expenses, excluding fuel price changes, increased only 11% sequentially,” said Lance Fritz, Union Pacific chairman, president and chief executive officer. “The strong financial results and quality service product delivered in the quarter are a testament to the women and men of Union Pacific as they continue to exhibit their commitment and resilience through safe operations.”
Third Quarter Summary
Operating revenue of $4.9 billion was down 11% in third quarter 2020, compared to third quarter 2019. Third quarter business volumes, as measured by total revenue carloads, decreased 4% compared to 2019. Premium volumes increased compared to 2019, while industrial and bulk declined. In addition:
- Quarterly freight revenue declined 11%, compared to third quarter 2019, as core pricing gains were more than offset by lower volumes, a less favorable business mix, and decreased fuel surcharge revenue.
- Union Pacific’s 58.7% operating ratio, an all-time quarterly record, improved 0.8 points compared to the third quarter 2019. Lower fuel prices positively impacted the operating ratio by 100 basis points.
- The $1.36 per gallon average quarterly diesel fuel price in third quarter 2020 was 35% lower than third quarter 2019.
- Union Pacific’s reportable personal injury rate was 0.90 per 200,000 employee-hours for the first three quarters 2020, compared to 0.82 for the same period 2019.
- Quarterly freight car velocity was 220 daily miles per car, a 3% improvement compared to third quarter 2019.
- Quarterly locomotive productivity was 138 gross ton-miles per horsepower day, an all-time quarterly record and an 11% improvement compared to third quarter 2019.
- Quarterly workforce productivity was 998 car miles per employee, an all-time quarterly record and a 13% improvement compared to third quarter 2019.
- Average maximum train length was 8,984 feet, a 13% increase compared to third quarter 2019.
Summary of Third Quarter Freight Revenues
- Bulk down 12%
- Industrial down 18%
- Premium down 1%
“The results we are delivering, both operationally and financially, deepen our conviction that the changes we’re making to transform our railroad are on target and on track,” said Fritz. “An improved customer experience, coupled with a lower cost structure, is opening up new markets and opportunities to grow our business as we win with customers and convert more freight to rail.”