OMAHA, Neb. — Union Pacific Corporation reported record 2008 second quarter net income of $531 million, or $1.02 per diluted share, compared to $446 million, or $.82 per diluted share in the second quarter of 2007.
“We achieved a record second quarter in the face of rising fuel costs and an estimated 5 cents earning reduction associated with Midwest flooding,” said Jim Young, Chairman and Chief Executive Officer. “We demonstrated the resiliency of our network by quickly restoring service to our customers, which provided us with a strong finish to the quarter, driving solid revenue growth and continued productivity improvements.”
2008 Second Quarter Summary
In the second quarter of 2008, Union Pacific reported record operating income of $931 million compared to $787 million in second quarter of 2007, an 18 percent improvement.
- The Company’s freight revenue grew 13 percent in 2008 to a best-ever $4.3 billion. Four of the six business groups, Agricultural, Chemicals, Energy and Industrial Products posted all-time record revenues. A fifth, Intermodal, set a second quarter revenue record. Five of the six business groups, Agricultural, Autos, Chemicals, Energy and Intermodal, set records for best-ever average revenue per car (ARC), while Industrial Products had a second quarter best for ARC. Overall ARC increased 16 percent, reaching an all-time record of $1,835 per car in the quarter.
- Business volumes in the second quarter of 2008, as measured by total revenue carloads, were 3 percent lower than second quarter 2007 at 2.4 million.
- The Railroad’s second quarter 2008 average quarterly fuel price was up 64 percent to $3.60 per gallon compared to $2.20 in 2007.
- Despite high fuel prices, the Company’s second quarter operating ratio improved nearly 1 point from 80.5 percent in 2007 to 79.6 percent in 2008.
- The Company’s second quarter 2008 fuel consumption rate, as measured by gallons per thousand gross ton-miles, was a quarterly best 1.216 versus 1.275 in the second quarter 2007.
- The effective tax rate in the second quarter of 2008 was 35.4 percent reflecting benefits derived from federal tax audits and state tax law changes, which resulted in one-time after tax earnings increases of $18 million.
- The Company’s second quarter 2008 Customer Satisfaction Index improved 3 points versus last year to 83, a post-merger best.
- The Company repurchased over 6.3 million common shares at an average share price of $75.83 in the second quarter of 2008. Year-over-year, second quarter weighted average diluted shares outstanding declined 4 percent.
Second Quarter 2008 Freight Revenue Summary versus 2007
- Agricultural up 29 percent
- Energy up 21 percent
- Chemicals up 14 percent
- Industrial Products up 9 percent
- Intermodal up 7 percent
- Automotive down 9 percent
“We expect that our diverse business mix will continue to provide us with opportunities through the year,” Young added. “Although high fuel prices and a soft economy present challenges, we remain committed to ongoing productivity and customer service initiatives as we look forward to achieving a record year.”
— Business Wire