Union Pacific Corporation reported a 16% increase in third-quarter net income to $2.1 billion, with higher revenue and freight volume supporting growth as fuel prices weighed on its operating ratio.
The results appeared in Exhibit 99.1 to a Form 8-K Union Pacific filed with the Securities and Exchange Commission (SEC) on Oct. 22. Diluted earnings per share were $3.49, compared with $3.01 a year earlier.
Operating revenue reached $7.2 billion, up 15% from the year-earlier quarter. Union Pacific said fuel-surcharge revenue, shipping volume, core pricing and other revenue contributed to the increase. A shift in business mix reduced part of the gain, the company said.
Revenue carloads increased 6%. Freight revenue excluding fuel surcharges also grew 6%, according to the earnings release. The 15% increase in total operating revenue exceeded carload growth; the company cited pricing, fuel surcharges and other revenue alongside volume as contributors to sales.
The reported operating ratio was 59.1%, an improvement of 0.10 percentage point from a year earlier. On an adjusted basis, the ratio was 58.8%, up 0.30 percentage point. Union Pacific estimated that higher fuel prices added 1.40 percentage points to the reported ratio. The two measures moved in different directions, with the reported figure improving and the adjusted figure rising.
Union Pacific kept its forecast for high-single-digit growth in reported earnings per share. The company said that outlook is consistent with its three-year compound annual growth rate (CAGR) target for earnings growth, which ranges from the high single digits to the low double digits through 2027.
