Union Pacific Corporation reported second quarter 2005 net income of $233 million, or $.88 per diluted share. This is a 47 percent improvement compared to the second quarter of 2004 when the company reported net income of $158 million, or $.60 per diluted share. Operating income during the second quarter of 2005 was $468 million, up 30 percent from $359 million reported in the second quarter of 2004.
"We continue to see strong demand for our services and we are improving our ability to handle the increased volumes more efficiently," said Dick Davidson, chairman and chief executive officer. "This is our first year-over- year operating income growth in six quarters. While we still have a lot of work to do, our progress is encouraging and we look forward to continuing this positive trend as we begin to see the benefits of our network management initiatives."
Second Quarter Overview
- Quarterly operating revenue was an all-time record $3.3 billion compared to $3.0 billion in the second quarter of 2004.
- Commodity revenue set an all-time quarterly record, up 10 percent to $3.2 billion. This compares to $2.9 billion in the second quarter of 2004 and was driven by a 1 percent increase in volumes as well as higher fuel surcharge recoveries and improved yields.
- Second quarter 2005 operating income of $468 million was the highest reported since the fourth quarter of 2003.
- The second quarter 2005 operating margin increased to 14 percent compared to 11.9 percent in 2004.
- Two of the Railroad's three key operating metrics, as reported to the Association of American Railroads, improved in the second quarter of 2005 versus the second quarter of 2004. Average terminal dwell time improved 11 percent from 30.9 hours to 27.4 hours and rail car inventory improved 2 percent to 318,434 cars. Average quarterly train speed fell slightly, from 21.3 mph to 21.2 mph comparing the second quarter of 2004 to 2005.
- The Railroad's average quarterly fuel price increased 44 percent versus the year ago quarter, from $1.16 per gallon in 2004 to $1.67 per gallon in the second quarter of 2005.
Second Quarter Railroad Commodity Revenue Summary versus 2004
- Industrial Products up 19 percent
- Agricultural up 16 percent
- Intermodal up 10 percent
- Chemicals up 7 percent
- Energy up 5 percent
- Automotive up 1 percent
Looking Forward
"We are confident that the men and women of Union Pacific are taking the right steps to once again produce improving financial results for our shareholders and better service performance for our customers," Davidson said. "Today our company has more business demand than we are able to fulfill -- a situation that I haven't seen during my 45-year career. We are encouraged by the changes we see in our day-to-day operations and firmly believe that the long-term future of this great Railroad has never been brighter."