Net income for the fourth quarter of 2019 totaled $1.44 billion, or $2.02/diluted share, compared with $1.55 billion, or $2.12/diluted share. Operating revenue in the fourth quarter was $5.2 billion, a 9% drop from the same period in 2018.
Fourth-quarter operating revenue slipped amid fewer shipments of agricultural, premium (including intermodal) and energy products, although industrial volumes were flat, Union Pacific (UP) said Thursday. Freight revenue dipped 10% to $4.89 billion amid lower volumes and a decreased fuel surcharge revenue.
Although revenue was down, operating expenses also fell in the fourth quarter. Operating expenses totaled $3.11 billion, a 12% decline from the fourth quarter of 2018.
The dip in operating expenses contributed to UP reaching an operating ratio of less than 60% in the third consecutive quarter. Fourth-quarter operating ratio was 59.7%, compared with 61.6% in the fourth quarter of 2018. Operating ratio — a measure of a company’s financial health — can be calculated by dividing operating expenses by revenue.
Service metrics also improved in the fourth quarter, with freight car velocity up 5% to 220 daily miles/car, train speed up 1% to 26.2 miles per hour and terminal dwell down 13% to 23.3 hours. Terminal dwell is the amount of time a train stays at a terminal.
|2019 Value||2018 Value||Y/Y Gross Change||Y/Y % Change|
|Freight revenue (in millions)||$4,851.0||$5,387.0||($536.0)||-9.9%|
|Revenue per carload||$2,435||$2,403||$32||1.3%|
|Gross ton miles (in millions)||200,801.0||230,537.0||-29,736||-12.9%|
|Revenue per ton mile (in millions)||$99,932||$115,608||-$15,676||-13.6%|
|Train velocity (mph)||26.2||26||0||0.8%|
|Dwell time (hours)||23.3||26.9||-4||-13.4%|