Union Pacific handles 6% more volume as quarterly revenue and profit set records

Union Pacific reported third-quarter operating revenue of $7.2 billion, a 15% increase, as revenue carloads grew 6%. The railroad said fuel surcharges, core pricing and other revenue contributed to growth, partly offset by the mix of business it carried.

Net income increased 16% to $2.1 billion, and diluted earnings rose 16% to $3.49 a share. Adjusted earnings were $3.53 a share. The railroad's reported operating ratio improved one-tenth of a percentage point to 59.1%, while its adjusted ratio moved three-tenths of a point to 58.8%.

Operational measures generally improved while volume increased. Freight-car velocity rose 1% to 228 daily miles per car, average terminal dwell declined 2% to 19.9 hours and workforce productivity increased 5%. Fuel consumption per thousand gross ton-miles improved 2%, according to the company's release.

Rail traffic is a broad measure of industrial and consumer supply chains, so handling more volume without a deterioration in several operating measures is significant beyond the railroad itself. Union Pacific nevertheless described the economic forecast as mixed. Its outlook and the claimed benefits of its proposed transcontinental merger remain forward-looking and subject to business and regulatory outcomes.

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