Union Pacific Reports Fourth Quarter Earnings

OMAHA, Neb. — Union Pacific Corp. reported 2009 fourth quarter net income of $551 million, or $1.08 per diluted share, compared to $661 million, or $1.31 per diluted share in the fourth quarter 2008.

“Union Pacific’s fourth quarter earnings reflected the continued impact of the recession that began in 2008,” said Jim Young, Union Pacific chairman and chief executive officer. “In this difficult environment, we’ve continued to focus on running our business efficiently and improving customer service. As a result, we finished the year with new records in safety, service, customer satisfaction and efficiency.”

Slightly stronger fourth quarter demand led to an increase over soft prior year volume levels in three of Union Pacific’s six business groups: Intermodal, Agricultural and Automotive. Fourth quarter 2009 operating revenues totaled $3.8 billion versus $4.3 billion in the fourth quarter 2008.

In addition:

  • Business volumes, as measured by total revenue carloads, were down 5 percent versus the fourth quarter 2008. Year-over-year freight revenues declined 13 percent to $3.5 billion in the fourth quarter 2009 as a result of lower volumes and a $320 million reduction in fuel surcharge revenue.
  • Quarterly diesel fuel prices decreased 17 percent from an average of $2.46 per gallon in the fourth quarter 2008 to an average of $2.05 per gallon.
  • Union Pacific’s operating ratio improved to 73.3 percent from 73.4 percent in 2008, the fourth consecutive year of fourth quarter records, primarily due to ongoing efficiency initiatives and pricing gains that offset the impact of lower volumes.
  • The Company’s Customer Satisfaction Index of 88 improved 3 points and ties a quarterly best.
  • Quarterly train speed, as reported to the Association of American Railroads, was 27.0 mph, up 1.9 mph or 8 percent versus the fourth quarter 2008. This improvement reflected continued productivity and operational improvements, as well as the impact of lower volumes.