Union Pacific Corporation (NYSE: UNP) announced its net income for the third quarter of 2024 at $1.7 billion, equating to $2.75 per diluted share. This marks an increase from the third quarter of 2023, which reported a net income of $1.5 billion or $2.51 per diluted share.
“Our results for the third quarter highlight the effectiveness of our strategy,” stated Jim Vena, Chief Executive Officer of Union Pacific. “Improved safety and service performance have fueled solid revenue growth, leading to double-digit increases in both operating income and earnings per share. The entire Union Pacific team is dedicated to meeting the needs of our customers and shareholders, and we are motivated to build on these successes for sustainable long-term growth.”
Third Quarter Highlights: 2024 vs. 2023
Financial Results:
- Operating revenue reached $6.1 billion, up 3% due to increased volume and core pricing gains, though this was somewhat offset by changes in business mix and lower fuel surcharge revenue.
- Freight revenue, excluding fuel surcharges, rose by 5%, supported by a 6% increase in revenue carloads.
- The operating ratio improved to 60.3%, a 310 basis point enhancement, with lower quarterly fuel prices contributing 120 basis points to this improvement.
- Operating income increased by 11% to $2.4 billion.
Operating Performance:
- Union Pacific reported improvements in safety metrics, with both personal injury and derailment rates showing positive trends year-to-date.
- Freight car velocity improved by 5%, averaging 210 daily miles per car.
- Locomotive productivity also rose by 5%, reaching 135 gross ton-miles (GTMs) per horsepower day.
- Workforce productivity jumped 12%, averaging 1,102 car miles per employee.
- The fuel consumption rate increased by 1% to 1.058 gallons per thousand GTMs.
Updated Expectations:
- Fourth-quarter results are anticipated to remain consistent with the third quarter while showing improvement year-over-year compared to the fourth quarter of 2023.
Affirmed Projections:
- The profitability outlook continues to exhibit positive momentum, supported by strong service offerings, enhanced network efficiency, and solid pricing strategies.
- Union Pacific plans to repurchase approximately $1.5 billion in shares throughout 2024.
- Pricing gains are expected to exceed inflation rates.
- The long-term capital allocation strategy remains unchanged, with a capital plan set at $3.4 billion.