Union Pacific Ends 2017 on the Right Track
Union Pacific Corp. announced that profits grew to $7.3 billion or $9.25 per share, a figure that includes a line item connected to the Tax Cuts and Jobs Act.
Excluding the tax benefit, the railroad generated $1.2 billion or $1.53. One year ago, the numbers were $1.1 billion or $1.39.
Freight revenue grew 5% year-over-year to $5.1 billion. Freight volume grew 1% companywide.
For the full year, Union Pacific generated $10.7 billion in profits or $13.36. Excluding the tax bill, the number was $4.6 billion or $5.79. In 2016, the railroad netted $4.2 billion or $5.07. Freight revenue climbed 7% to $19.8 billion with a 2% increase in freight volume.
“We are optimistic the economy will favor a number of our market segments leading to another year of positive volume growth. Increased unit volume, combined with inflation plus core pricing and G55-0 productivity initiatives, should result in another year of revenue growth and improved margins,” CEO Lance Fritz said.
Intermodal revenue improved 4% to $1 billion in the fourth quarter and improved 3% to $3.8 billion for the entire year. But the growth was entirely attributed to higher pricing per railcar as total carloads were flat at 826,000 in the fourth quarter and nearly 3.3 million for the year.
Industrial products drove the growth for Union Pacific in 2017. In the fourth quarter, revenue climbed 28% to $1.1 billion and 22% for the entire year to $4.1 billion. The number of carloads jumped 17% to 309,000 in the quarter and improved 12% to 1.2 million for the entire year.
For the full year, the operating ratio deteriorated 50 basis points to 63%, although it improved 60 basis points to 62.6% in the fourth quarter.