Union Pacific raised its net profit nearly 18 percent in 2011 to $3.3 billion on a 15 percent year-over-year increase in operating revenue to $19.6 billion.
Last year was the most profitable year in the UP’s 150-year history, said Chairman and CEO Jim Young, and the rail operator is on track to higher profits in 2012. Stronger industrial freight helped push UP’s fourth quarter revenue up 16 percent to $5.1 billion, but net profit rose faster, climbing 24 percent to $964 million.
Profit rose at the largest freight railroad in North America despite a 44 percent increase in fuel spend in 2011 to $3.6 billion and slow volume growth. Fourth quarter net profit increased sequentially as well, climbing 6.6 percent from $904 million in the third quarter despite slim volume growth
Average revenue per carload was up 13 percent in the fourth quarter and 12 percent for the year, indicating higher rates and greater efficiency. Freight revenue rose 16 percent in the fourth quarter to $4.8 billion and 15 percent for the full year, reaching $18.5 billion, the company said Thursday.
Four of UP’s six business groups reported strong volume gains in the fourth quarter, with chemical and automotive carloads rising 10 percent from a year ago.
UP’s operating ratio dropped to 68.3 percent, a fourth-quarter record. For the year, the operating ratio was 70.7 percent, compared with 70.6 in 2010.