Union Pacific reported file third-quarter income and earnings as larger quantity, pricing, and effectivity positive factors greater than offset the influence of rising gas costs and inflation.
“Union Pacific’s third-quarter outcomes show our skill to soundly ship the service we bought our prospects whereas effectively dealing with 6% quantity progress,” Chief Govt Jim Vena mentioned on the railroad’s (NYSE: UNP) earnings name right this moment.
Working earnings elevated 15%, to $2.94 billion, as income grew 15%, to $7.19 billion. Earnings per share rose 16%, to $3.49.
The railroad’s working ratio was 59.1%, a 0.1-point enchancment in comparison with a yr in the past. Workforce productiveness, measured by car-miles per worker, improved 5%.
Total quantity was up 6% for the quarter. Premium quantity — which incorporates intermodal and automotive visitors — was up 9%. Industrial merchandise visitors grew 6% within the quarter, whereas bulk quantity was flat.
“Home intermodal delivered its fifth consecutive file quarter in each quantity and income. Our basis of service mixed with sturdy enterprise growth and the deployment of buffer sources enabled 13% quantity progress,” mentioned Kenny Rocker, govt vice chairman of selling and gross sales. “Worldwide intermodal volumes improved 8% versus final yr pushed by sturdy West Coast import volumes and enterprise wins.”
The service provided a constructive outlook for fourth-quarter quantity, as excessive gas costs and tight truck capability will proceed to drive conversions of truckload freight to rail. The lone exception is coal quantity, which can stay underneath strain because of low pure fuel costs and excessive utility stockpiles.
Rocker expects a 3rd straight yr of file home intermodal quantity.
Total quantity progress prompted UP to shift some capital spending deliberate for subsequent yr into this yr. UP now expects to spend $3.5 billion on capital tasks this yr, up from $3.3 billion.
UP’s key operational metrics improved barely in comparison with final yr, with automotive miles per day up 1%, common prepare pace flat, and terminal dwell down by 2%. Prepare size grew 2%, to a median of 9,969 ft.
“Working self-discipline and constant execution of the basics drove one other quarter of file workforce productiveness, file prepare size, and file gas consumption,” mentioned Eric Gehringer, govt vice chairman of operations.
The railroad mentioned its worker private harm and prepare accident charges improved in comparison with the three-year rolling common however didn’t present specifics.
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