Union Pacific Reports Best-Ever Quarterly and Full Year Results
OREANDA-NEWS. Union Pacific Corporation (NYSE: UNP) today reported net income of USD 1.2 billion, or USD 2.55 per diluted share, for the fourth quarter 2013 compared to USD 1 billion, or USD 2.19 per diluted share, in the fourth quarter 2012.
"For the first time in six quarters, we reported overall volume growth, despite significantly weaker coal shipments. It highlights the strength of our diverse franchise, the extensive network reach we have to various markets, and a strong grain harvest," said Jack Koraleski, Union Pacific chief executive officer. "Volume growth, combined with solid core pricing gains and our continued focus on safety, service, and efficiency, generated a record fourth quarter operating ratio of 65.0 percent. The fourth quarter wrapped up another tremendous year for Union Pacific, with our overall financial performance exceeding all previous milestones."
Fourth Quarter Summary
Operating revenue increased 7 percent in the fourth quarter 2013 to more than USD 5.6 billion versus USD 5.25 billion in the fourth quarter 2012. Fourth quarter business volumes, as measured by total revenue carloads, grew 2 percent compared to 2012. Volume growth from agricultural products, automotive, industrial products and intermodal shipments more than offset declines in coal and chemical volumes. In addition:
Quarterly freight revenue increased 7 percent compared to the fourth quarter 2012, driven by core pricing gains and volume growth.
Union Pacific's operating ratio of 65.0 percent was a fourth quarter record, 2.1 points better than the fourth quarter 2012 and only 0.2 points off the all-time quarterly record of 64.8 percent set in the third quarter 2013.
Average quarterly diesel fuel prices decreased 4 percent to USD 3.11 per gallon in the fourth quarter 2013 compared to USD 3.25 per gallon in the fourth quarter 2012.
The Customer Satisfaction Index of 93 matched the fourth quarter record set in 2012.
Quarterly train speed, as reported to the Association of American Railroads, was 25.8 mph, down 3 percent from the fourth quarter 2012, primarily due to severe winter weather conditions.
The Company repurchased more than 4.9 million shares in the fourth quarter 2013 at an average share price of USD 159.36 and an aggregate cost of USD 786 million.
Summary of Fourth Quarter Freight Revenues
Agricultural up 19 percent
Automotive up 17 percent
Industrial Products up 14 percent
Chemicals up 3 percent
Intermodal flat
Coal down 1 percent
2013 Full Year Summary
For the full year 2013, Union Pacific reported net income of USD 4.4 billion or USD 9.42 per diluted share. This compares to USD 3.9 billion or USD 8.27 per diluted share in 2012, 11 and 14 percent increases, respectively. Operating revenue totaled a record USD 21.96 billion versus USD 20.9 billion in 2012. Operating income increased 10 percent to more than USD 7.4 billion, up from USD 6.7 billion in 2012. In addition:
Freight revenue grew 5 percent to USD 20.7 billion compared to USD 19.7 billion in 2012. Carloadings were flat versus 2012 as declines in coal and agricultural shipments offset volume growth from automotive, chemicals, and industrial products shipments. Intermodal volumes were flat compared to 2012.
Union Pacific's operating ratio of 66.1 percent was a full year record, improving 1.7 points from the previous record set in 2012.
Average diesel fuel prices decreased 2 percent to USD 3.15 per gallon in 2013 from USD 3.22 per gallon in 2012.
The Company increased its quarterly dividend per share by 14.5 percent to USD 0.79 cents per share in the third quarter 2013. Total dividends declared for the full year 2013 grew 19 percent compared to the full year 2012.
The Company repurchased more than 14.5 million shares in 2013 at an average share price of USD 152.52, and an aggregate cost of USD 2.2 billion.
2014 Outlook
"As we look at 2014, we see signs that the economy is slowly strengthening. We're well-positioned for economic growth and are confident in our ability to deliver on our customers' growing transportation needs," Koraleski said. "We'll continue our unrelenting focus on both safety and service to our customers. We strongly believe in the power and potential of the Union Pacific franchise to drive even greater financial performance and shareholder returns in the years to come."
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