Union Pacific Corporation (NYSE: UNP) shares lost ground Thursday, on promising second-quarter numbers. The Omaha-based carrier today reported 2018 Q2 net income of $1.5 billion, or a second-quarter record $1.98 per diluted share. This compares to $1.2 billion, or $1.45 per diluted share, in the second quarter 2017.
According to CEO Lance Fritz, "Overall, I am pleased with the effort put forth by the entire Union Pacific team; however, I recognize the results could have been better.
"Network performance improved significantly coming out of the First Quarter, but a tunnel outage and train-crew shortages created a headwind in June. I am confident we have the right plans in place to drive improvement in our operations and a better service experience for our customers."
Union Pacific also reported quarterly freight revenue improved 8% compared to the second quarter 2017, as volume growth, increased fuel surcharge revenue, and core pricing gains were partially offset by negative mix of traffic.
The company’s 63% operating ratio increased 1.1 points compared to the second quarter 2017. The $2.30 per-gallon average quarterly diesel fuel price in the second quarter 2018 was 36% higher than the second quarter 2017.
Quarterly train speed was 24.7 mph, 3% slower than the second quarter 2017.
Operating revenue of $5.7 billion was up 8% in the second quarter 2018 compared to the second quarter 2017. Second-quarter carloads increased 4% compared to 2017.
Volume increases in industrial and premium more than offset declines in agricultural products and energy.
Union Pacific Railroad connects 23 states in the western two-thirds of the country by rail, providing a critical link in the global supply chain. In the past 10 years, Union Pacific invested approximately $34 billion in its network and operations to support America's transportation infrastructure.
Shares in UNP deleted 95 cents, to $140.30 Thursday morning.
