Summary
Union Pacific Corporation reported a decrease in operating revenues to $5.38 billion for the first quarter of 2019, down from $5.48 billion in the same period of 2018. This decline was primarily driven by a 2% decrease in freight volumes, despite steady average revenue per car due to core pricing gains and higher fuel surcharge revenue. While revenues were impacted by significant weather disruptions in the Midwest and Pacific Northwest, which also led to increased operating expenses, the company managed to achieve a slight increase in operating income of 1% to $1.96 billion. This was aided by productivity savings, lower fuel prices, and a notable one-time reduction in compensation expenses due to a railroad retirement tax refund. Net income increased by 6% to $1.39 billion, resulting in diluted earnings per share of $1.93, up from $1.68 in the prior year's quarter. The company also saw an improvement in its operating ratio to 63.6%, a 1.0 percentage point decrease year-over-year, reflecting better operational efficiency. Union Pacific continued its capital return program, repurchasing $2.99 billion in common stock during the quarter, and announced a new authorization for up to 150 million shares. The company forecasts approximately $3.2 billion in capital expenditures for 2019.
Financial Highlights
47 data points| Revenue | $5.38B |
| Operating Expenses | $3.42B |
| Operating Income | $1.96B |
| Interest Expense | $247.00M |
| Net Income | $1.39B |
| EPS (Basic) | $1.94 |
| EPS (Diluted) | $1.93 |
| Shares Outstanding (Basic) | 716.80M |
| Shares Outstanding (Diluted) | 719.50M |
Key Highlights
- 1Operating revenues decreased by 2% to $5.38 billion, driven by a 2% decline in freight volumes, partly due to severe weather events impacting operations.
- 2Net income increased by 6% to $1.39 billion, resulting in diluted EPS of $1.93, up from $1.68 in Q1 2018.
- 3Operating income grew 1% to $1.96 billion, benefiting from productivity initiatives, lower fuel prices, and a one-time employment tax refund that reduced compensation expenses.
- 4The operating ratio improved by 1.0 percentage point to 63.6%, indicating enhanced operational efficiency.
- 5Capital expenditures for the first quarter were $752 million, with full-year 2019 capital expenditures projected at approximately $3.2 billion.
- 6The company significantly increased its share repurchase activity, spending $2.99 billion in Q1 2019 and announcing a new authorization to repurchase up to 150 million shares.
- 7Adoption of new lease accounting standards (ASC 842) resulted in approximately $2 billion increase in assets and liabilities, but no impact on the consolidated results of operations or cash flows.