Q2 2024 Union Pacific Corp Earnings Call Transcript
Key Points
- Union Pacific Corp (UNP) reported a 7% increase in net income to $1.7 billion, or $2.74 per share, compared to the previous year.
- Operating revenue increased by 1% to $6 billion, driven by solid core pricing gains and slightly increased volume.
- Expenses were down 4% year-over-year, showcasing effective cost management despite inflationary pressures.
- The operating ratio improved by 300 basis points to 60.0%, indicating better operational efficiency.
- Free cash flow improved by 43% to $853 million, and the company resumed share repurchases, returning $1.7 billion to shareholders year-to-date.
- Coal volume was down 23% due to ongoing market decline and lower natural gas prices, impacting overall revenue.
- Fuel surcharge revenue declined by 5%, affecting freight revenue negatively.
- The industrial segment saw a 3% decrease in volume, reflecting challenges in certain markets.
- Weather disruptions, including flooding, impacted service levels and network performance.
- The company faces ongoing inflationary pressures, particularly in compensation and benefits, which increased by 4%.
Greetings. Welcome to the Union Pacific Second Quarter Earnings Call. (Operator Instructions) As a reminder, this conference is being recorded, and the slides for today's presentation are available on Union Pacific's website. It is now my pleasure to introduce your host, Mr. Jim Vena, Chief Executive Officer for Union Pacific. Thank you. Mr. Vena, you may now begin.
Thanks, Rob, and good morning and nice to come to you all from a beautiful morning here in Omaha, and thanks for joining us today to discuss Union Pacific's second quarter results. I'm joined by our Chief Financial Officer, Jennifer Hamann; our Executive Vice President of Marketing and Sales, Kenny Rocker; and our Executive Vice President of Operations, Eric Gehringer.
As we dive into the discussion of the second quarter, you'll hear that operating outdoors these past few months has not been easy, but I'm pleased with how we manage those challenges to drive strong financial results. It provides another proof point that our
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