OMAHA, Neb. – Union Pacific’s profits rose in the fourth quarter as volume increased 5% and operating costs fell.
“Our strong fourth-quarter results represent a great capstone to a very successful year for Union Pacific,” CEO Jim Vena said in a statement. “The team has fully embraced our strategy to lead the industry in safety, service, and operational excellence. That commitment has produced industry leading financial results in 2024, punctuated by our strong finish to the year. We will carry this momentum into 2025 as we seek to unlock the full potential of the UP franchise.”
For the quarter, UP’s operating income increased 5%, to $2.5 billion, as revenue declined 1%, to $6.1 billion. Earnings per share rose 7%, to $2.91. For the year, operating income was up 7%, to $9.7 billion, as revenue grew 1%, to $24.3 billion.
The railroad’s fourth quarter operating ratio improved 2.2 points, to 58.7%, as operating expenses declined 4%. For the full year, the operating ratio improved 2.4 points, to 59.9%. UP’s return on invested capital — which measures how efficiently a company uses its capital to generate profits — was up 0.3 points, to 15.8%.
Traffic volume was up 5% overall in the fourth quarter, driven by gains in intermodal, grain, and chemicals business. For the year, volume was up 3%.
UP’s outlook for this year is mixed due to economic uncertainty. Executives expect year-over-year volume declines in coal, metals, and international intermodal volume. Automotive traffic is expected to be flat for the year, while UP projects that its grain, chemicals, plastics, and domestic intermodal business will see growth.
UP’s key operational and service metrics mostly improved for the quarter. Freight car velocity increased 1%, to 219 miles per day, thanks to lower terminal dwell. The manifest service performance index improved 5 points to 96%, but the intermodal service performance index dropped 7 points to 89% due to a surge in international volume.
The railroad said its derailment and personal injury rates improved for the year, but did not release specifics.
UP’s capital program will total $3.4 billion this year, including $1.9 billion for maintenance projects, $600 million for capacity improvements, $500 million for locomotive modernizations and new freight cars, and $400 million for technology investments.
UP plans share repurchases of between $4 billion and $4.5 billion this year.
