Union Pacific generated a net income of $1.1 billion during the second quarter — $100-million rise over 2012’s second-quarter results — which helped the railroad achieve its best ever quarter results on record.
At $5.5 billion, operating revenues increased 5 percent, year over year, and operating income of $1.9 billion was up 9 percent. The operating ratio jumped 1.3 points to 65.7 percent. Freight revenue in the quarter increased 5 percent.
"Union Pacific achieved record financial milestones this quarter," the railroad's chief executive officer, Jack Koraleski, said in a statement. "We managed our network efficiently and continued to show the agility of our strong franchise. When combined with solid core pricing gains, we more than offset the slight shortfall in volumes to generate best-ever quarterly earnings and operating ratio performance."
Business volume decreased 1 percent, year over year, during the quarter due to declines in intermodal and agricultural products, which fell 1 percent and 8 percent, respectively. Activity in automotive and chemicals both rose 12 percent during the period, but the increase was not enough to make up the decline of other volumes in the business. Industrial and coal volumes stayed flat compared to the same period last year.
"As we move into the second half of the year, the economic outlook remains uncertain, but we're hopeful that we'll see some economic improvement in the months ahead," Koraleski said. "Union Pacific is well positioned with our diverse franchise and strong value proposition. We'll continue focusing on reinvestible pricing; attracting new, profitable growth opportunities; and running a safe, efficient, and reliable network that generates greater value for both our customers and shareholders going forward." - Jon Ross