The biggest railroad just got bigger, as Union Pacific saw profit jump 43 percent in the first quarter to $516 million, from the same period in 2009, while revenue grew 16 percent to $3.755 billion.
Calling it “a strong start for the year,” Chairman and CEO James R. Young also said “we saw quarterly volume growth on our railroad for the first time in two years, and we leveraged that volume by running a safe, service-focused and efficient network.”
UP saw its best ever first quarter operating ratio of expenses relative to receipts. Young said it also “generated strong cash from operations, setting a solid foundation for future opportunity and growth.”
In some areas the company wasn’t done with cuts that began in the recession. While overall expenses grew 8 percent from a year earlier, UP reduced compensation and benefit costs 1 percent to $1.059 billion as the quarterly average workforce shrank 6 percent to 42,130 employees.
It also cut 9 percent from rents of equipment and other property, to $290 million. Fuel costs jumped 51 percent as UP paid much more for fuel and burned more of it, though it reduced its fuel use rate and can recover the cost spikes with surcharges on shipments.
Its $516 million net income was 13.74 percent of revenue, up from a profit margin of 11.17 percent in the 2009 first quarter when traffic was falling rapidly.
This quarter’s total revenue carload business rose 13 percent and revenue ton-miles grew 7 percent from traffic gains in five of the carrier’s six main business segments. Revenue grew in all six. Average revenue per unit increased 3 percent to $1,804, with RPU on automobile shipments jumping 21 percent to $2,022 and intermodal gaining 4 percent to $930.
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