UP posts record 68.22% operating ratio

Jim Young, Union Pacific chairman and chief executive officer, said Thursday that “strong volume growth, pricing gains, and operating efficiency” combined to produce 2010 third-quarter net income of $778 million, or $1.56 per diluted share, beating Wall Street estimates, compared with $514 million, or $1.01 per diluted share, in third-quarter 2009. Operating revenue grew 20% to $4.4 billion versus $3.7 billion in the third quarter of 2009.

Union Pacific’s operating ratio was a best-ever 68.2%, 5.6 points better than third-quarter 2009 and 1.2 points better than the previous record.

Other quarterly records were set as diluted earnings per share rose 54% to $1.56 and operating income increased 46% to $1.4 billion.

Third-quarter revenue carloads grew 14% versus 2009 levels as all six business groups reported volume growth. Operating revenue increased 20% to $4.4 billion versus $3.7 billion in third-quarter 2009.

“As the economy continues to recover, we stand ready tosafely and reliably haul more freight,” said Young (pictured at right). “Longer term, we believe Union Pacific is positioned to provide strong value for our customers and shareholders, as the long-standing need for freight rail transportation in our nation provides us with a stable foundation as well as a platform for future growth.”