In spite of quarterly business volumes being down slightly compared to 2011, Union Pacific Corp. on Oct. 18 reported 2012 third quarter net income of $1 billion.
The company reported a double-digit drop in coal volumes, a reflection of the lengthy slump in shipments dating back to the winter of 2011-2012, which was relatively mild. But the decline didn’t hurt the railroad’s overall financial performance.
“Despite a 12 percent decline in coal volumes and significantly weaker steel and scrap metal markets, we generated best-ever financial results across the board,” Union Pacific CEO Jack Koraleski said. “We achieved solid core pricing gains, managed our network efficiently and delivered on the benefits of our diverse franchise with growth in other markets.”
Volume growth in chemicals, automotive and intermodal offset declines in shipments of coal, agricultural products and industrial products, according to the company. Quarterly operating revenue increased five percent in the third quarter of 2012 to $5.3 billion versus $5.1 billion in the same quarter of 2011.
Additionally, UP reports that quarterly freight revenue increased four percent compared to the third quarter of 2011, mainly driven by core pricing gains of five percent; and that the company’s operating ratio of 66.6 percent was an all-time quarterly best, 2.5 points better than the third quarter 2011 and a 0.4 point improvement from the previous record set in the second quarter 2012.
Average quarterly diesel fuel prices were flat at $3.19 per gallon in the third quarter 2012 compared to $3.18 per gallon in the third quarter 2011, while the Customer Satisfaction Index of 94 was an all-time quarterly record and was three points better than the same quarter last year.
Quarterly train speed, as reported to the Association of American Railroads, was 26.1 mph, increasing six percent compared to the third quarter 2011.
