OMAHA, Neb. — Union Pacific Corp. reported 2008 fourth quarter net income of $661 million, or $1.31 per diluted share, a 35 percent increase compared to $491 million, or $0.93 per diluted share for the fourth quarter of 2007. The company posted quarterly operating revenues of $4.3 billion in 2008 versus $4.2 billion in the fourth quarter 2007.
Union Pacific posted solid earnings for the quarter and the year, despite numerous challenges,” said Jim Young, Union Pacific chairman and chief executive officer. “We increased profitability by operating a safe and efficient railroad that delivered excellent service and value for our customers. In the fourth quarter, our operating ratio improved significantly as we benefited from lower fuel costs, better pricing, and productivity gains, all of which helped offset the impact of declining volumes in this difficult economic environment.”
Although business volumes declined in the quarter, Union Pacific reported operating income of $1.1 billion in the fourth quarter 2008, a 32 percent year-over-year improvement driven by lower fuel costs, continued pricing gains and strong productivity. The company’s freight revenues grew two percent in the quarter to $4.1 billion. In addition:
— The company’s fourth quarter 2008 Customer Satisfaction Index improved seven points to 85, an all-time company high.
— Fourth quarter 2008 average quarterly fuel price declined six percent to $2.46 per gallon, compared to $2.62 per gallon in the fourth quarter 2007.
— Business volumes, as measured by total revenue carloads, were 12 percent lower in 2008 than in the fourth quarter 2007.
— Union Pacific’s operating ratio improved six points to 73.4 percent in the fourth quarter 2008.
For the full year 2008, Union Pacific reported net income of $2.3 billion, or $4.54 per diluted share, compared to $1.9 billion, or $3.46 per diluted share in 2007. The company posted operating revenues of $18.0 billion in 2008 compared to $16.3 billion in 2007. Operating income increased to $4.1 billion, a 21 percent improvement over 2007.
— Freight revenues grew 11 percent to $17.1 billion.
— Average fuel price per gallon increased 39 percent to $3.15 from $2.27.
— Business volumes were down five percent.
“Although we expect 2009 will be a difficult year for our Company, our customers and our employees, we are challenging ourselves to deliver an even higher level of performance,” Young said. “In this tough economic environment, we remain dedicated to providing excellent service to our customers, making strategic investments for long-term growth and producing strong financial returns.”