Net profit was $1.3 billion, or $2 per diluted share, compared with $1.5 billion, or $2.15 per diluted share, in the first quarter of 2020.
Operating revenue was $5 billion, a 4% drop year-over-year amid a 1% drop in overall volumes. Bulk volumes slipped 1%, while industrial volumes fell 13% and premium volumes rose 2%.
Bulk volumes include grain and grain products, fertilizer and coal, among other goods, while industrial volumes include chemicals, metals, forest products and energy products. Union Pacific’s (UP) premium segment includes intermodal and automotive volumes.
Meanwhile, operating expenses fell 3% to $3 billion on lower expenses for compensation and benefits, purchased services and materials, fuels, and equipment and other rents.
UP’s operating ratio (OR) rose slightly to 60.1% from 59% in the first quarter of 2020. Investors sometimes use OR to gauge the financial health of a company, with a lower OR implying improved health.
“The first quarter presented some real challenges that impacted our results, but the team did a great job managing the business,” said UP President and CEO Lance Fritz, “We generated solid productivity through efficient use of our resources despite the significant weather event that covered most of our network in February and early March.”
Fritz continued, “I am particularly proud of the women and men of Union Pacific who rolled up their sleeves and kept the network safe, efficient and stable. Looking to the rest of the year, an improving economic outlook, our continued commitment to value-based pricing that exceeds inflation and the opportunity for strong productivity give us confidence to affirm our 2021 guidance.”