Union Pacific Profit Falls 17 Percent

Western-U.S. carrier Union Pacific Railroad saw fourth-quarter profit fall 17 percent from a year earlier to $551 million, while net income for all of 2009 fell 19 percent to $1.9 billion.

UP generated a 14.7 percent profit in the final 2009 period, relative to operating receipts, while its full-year profit came to 13.4 percent of operating revenue.

The company pulled in revenue of nearly $3.8 billion for the October-December quarter, down 12 percent from a year earlier, while receipts for all of 2009 fell 21 percent to $14.1 billion.

While the latest quarterly net fell 17 percent, UP said part of that was due to higher expenses than at the same time in 2008. Rail operating profit alone fell just 12 percent in the fourth quarter to $1 billion.

Traffic was down 5 percent overall in the quarter, from the same time in 2008 when volume was rapidly shrinking after the financial markets collapsed. However, UP’s intermodal traffic grew 5 percent from a year earlier while agricultural loadings rose 3 percent and even the hard-hit automotive shipments managed a 1 percent gain.

Average revenue per shipment shrank considerably less than total receipts at a 9 percent decline. However, UP said its per-car average has risen in each of the last three quarters, to $1,726 in the final period.

The company has also been cutting costs by idling equipment and personnel. UP said it averaged 42,157 workers in the fourth quarter, down 10 percent from the last 2008 period.

James R. Young, the company’s chairman, president and CEO, said the earnings “reflected the continued impact of the recession that began in 2008. In this difficult environment, we've continued to focus on running our business efficiently and improving customer service.”

Contact John D. Boyd at jboyd@joc.com.