Union Pacific posts record financial results, raises outlook

Overall volume was up 2% for the quarter. Premium business, including intermodal and automotive, was up 4%, almost entirely from intermodal. Industrial products volume increased 3%. Bulk business was down 1% as a 12% increase in grain traffic was not enough to overcome a 14% decline in coal volume.

“Domestic intermodal delivered its fourth consecutive record quarter in both volume and revenue. It’s evident our outstanding service set the foundation to grow the business, and that’s exactly what we’re doing,” said Kenny Rocker, executive vice president of marketing and sales. “In the second quarter, private asset, rail asset, and parcel volumes were all up double digits, benefiting from constrained truck capacity and share gains.”

Omaha-based UP now expects high single-digit percentage growth in earnings per share, up from mid single-digits, as the railroad’s economic forecast rose to mixed from muted. UP has a positive outlook for all of its major traffic segments with the exception of coal, which faces headwinds from a combination of high power plant stockpiles and lower natural gas prices.

The railroad’s key operating metrics improved for the quarter. Average car miles per day increased 5%, to 231, as terminal dwell declined 7%, to 19.7 hours, and average train speed rose 3%, to 24.7 mph.

“We delivered record second quarter operating performance, ran a fluid network, and improved safety all while handling 2% more volume,” said Eric Gehringer, executive vice president of operations.

UP saw record workforce productivity as train and engine crew headcount declined 2%. UP also set records for train length and fuel consumption, while terminal dwell tied a company record.

The railroad said its safety performance improved, too, but did not provide specifics on its employee injury and train accident rates.

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