Union Pacific Corporation (NYSE: UNP) today reported 2015 third quarter net income of $1.3 billion, or $1.50 per diluted share, compared to $1.4 billion, or $1.53 per diluted share, in the third quarter 2014.
"Total volumes decreased about 6 percent in the quarter, more than offsetting another quarter of solid core pricing gains," said Lance Fritz, Union Pacific chairman, president and chief executive officer. "On the cost side, we've made significant progress aligning our resources to current demand, and I am pleased to report a quarterly record operating ratio of 60.3 percent."
Third Quarter Results
Diluted earnings per share of $1.50 declined 2 percent.
Operating income totaled $2.2 billion, down 5 percent.
Operating ratio of 60.3 percent, improved 2 points.
Third Quarter Summary
Operating revenue of $5.6 billion was down 10 percent in the third quarter 2015 compared to the third quarter 2014. Third quarter business volumes, as measured by total revenue carloads, declined about 6 percent compared to 2014. Volume declined in each of the Company's business groups with the exception of automotive. In addition:
Quarterly freight revenue decreased 10 percent compared to the third quarter 2014, as volume declines, lower fuel surcharge revenue, and negative business mix more than offset core pricing gains.
Union Pacific's 60.3 percent operating ratio was an all-time quarterly record, 2 points better than the third quarter 2014 and 1.1 points better than the previous all-time quarterly record set in the fourth quarter 2014. The operating ratio benefited by about 1.5 points from the net impact of lower fuel prices during the quarter.
The $1.81 per gallon average quarterly diesel fuel price in the third quarter 2015 was 40 percent lower than the third quarter 2014.
Quarterly train speed, as reported to the Association of American Railroads, was 25.6 mph, 8 percent faster compared with the third quarter 2014.
The Company repurchased 13.8 million shares in the third quarter 2015 at an aggregate cost of more than $1.2 billion.
Summary of Third Quarter Freight Revenues
Agricultural Products down 4 percent
Chemicals down 6 percent
Intermodal down 11 percent
Industrial Products down 16 percent
Coal down 18 percent
"We've made great progress in meeting this year's challenges," Fritz said. "As we finish 2015 and head toward next year, we continue to face many uncertainties. Energy prices, the consumer economy, grain markets and the strength of the U.S. dollar will all be key to future demand. Over the long term, we are well positioned to safely provide our customers with excellent service, while delivering strong value to our shareholders."