UP’s profits up once again
Union Pacific Corp., owners of the largest North American railroad Union Pacific Railroad, Thursday reported fourth quarter net income of $296 million, up 275 percent from $79 million a year earlier.
UP’s fourth quarter 2004 results included a $154 million after-tax exceptional charge for asbestos claims. Without the exceptional charge, UP’s net income in the last quarter improved 27 percent.
The fourth quarter operating income was up $533 million, from a claim-affected $204 million a year ago. The adjusted increase without the charge equals 18 percent.
Revenue in the fourth quarter increased 13 percent to $3.62 billion from $3.21 billion.
For the full year 2005, UP’s net earnings jumped 70 percent to $1.02 billion compared to $604 million in 2004. Operating income was $1.79 billion, up 39 percent from $1.29 billion.
Operating margin was 13.2 percent compared to 10.6 percent in 2004. UP attributed 2 points of the 2005 improvement to the negative impact of the asbestos charge made to the 2004 results.
UP’s annual revenue surpassed 2004’s best-ever performance, rising 11 percent to $13.57 billion from $12.2 billion a year earlier.
The company witnessed increased revenue in all six of its business segments: agricultural up 18 percent to $1.97 billion; industrial products up 17 percent to $2.81 billion; intermodal up 10 percent to $2.46 billion; chemicals up 8 percent to $1.84 billion; energy up 7 percent to $2.57 billion; and automotive up 3 percent to $1.27 billion.
UP said its carloads increased 1 percent to 9.54 million loads in 2005.
“Looking ahead, we are optimistic about 2006. Our network is more resilient than it was at this time last year and we are continuing to build momentum,” said Jim Young, UP’s president and chief executive officer. “We expect demand will continue to be strong, particularly in the areas of coal and intermodal.”
UP’s share price closed Thursday up $5.02, or by 6.28 percent, to $85.02 on the New York Stock Exchange.