Summary
Union Pacific Corporation (UNP) reported its first-quarter 2009 results, showing a significant year-over-year decline in operating revenues, primarily driven by a 20% decrease in freight revenues. This downturn is attributed to a 21% reduction in volume across most market sectors, a direct consequence of the ongoing economic recession. Despite lower volumes, the company managed to improve operational efficiency, with average train speed increasing by 23% and terminal dwell time decreasing by 4%. Significant cost-saving measures were implemented, including workforce reductions and reduced locomotive and freight car utilization, which, combined with lower fuel prices, helped to offset some of the revenue decline. Financially, net income decreased to $362 million from $443 million in the prior year, translating to diluted earnings per share of $0.72 compared to $0.85. The company maintained a strong liquidity position with a significant portion of its revolving credit facility undrawn and successfully issued $750 million in new long-term debt. While facing economic headwinds, Union Pacific demonstrated effective cost management and operational improvements, positioning itself to navigate the challenging economic environment.
Financial Highlights
28 data points| Revenue | $3.42B |
| Operating Expenses | $2.74B |
| Operating Income | $671.00M |
| Interest Expense | $141.00M |
| Net Income | $362.00M |
| EPS (Basic) | $0.36 |
| EPS (Diluted) | $0.36 |
| Shares Outstanding (Basic) | 1.01B |
| Shares Outstanding (Diluted) | 1.01B |
Key Highlights
- 1Total operating revenues decreased by 20% to $3.415 billion in Q1 2009 compared to $4.270 billion in Q1 2008, largely due to a 20% decline in freight revenues.
- 2Freight carloads decreased by 21% year-over-year, reflecting the impact of the economic downturn on demand across various commodity groups, with notable declines in Automotive (-48%) and Industrial Products (-27%).
- 3Net income fell by 18% to $362 million, and diluted EPS dropped to $0.72 from $0.85, indicating a challenging revenue environment.
- 4Operating expenses decreased by 21% to $2.743 billion, significantly aided by a 60% reduction in fuel costs and a 5% reduction in workforce.
- 5Operational efficiency metrics improved, with average train speed increasing 23% and average terminal dwell time decreasing 4%, driven by lower volumes and network management initiatives.
- 6The company successfully managed its liquidity, with $1.9 billion available under its revolving credit facility and no draws made during the quarter, and also issued $750 million in new debt.
- 7Capital expenditures were reduced to $526 million in Q1 2009, down from $620 million in Q1 2008, with full-year planned capital expenditures reduced to approximately $2.6 billion.