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Rail News: Union Pacific Railroad

UP continues 'remarkable' financial performance; plans to cut costs, jobs to counter economic, fuel-price concerns


On Jan. 22, Union Pacific Railroad reported a banner fourth-quarter, capping a "remarkable year," said Chairman and Chief Executive Officer Dick Davidson in a prepared statement.

The railroad earned record quarterly net income of $378 million, a 37 percent increase compared with fourth-quarter 2001's $275 million.
UP's quarterly operating income of $579 million increased 2 percent and operating revenue of $3.1 billion rose 5 percent compared with the same 2001 period.

However, the railroad's quarterly operating ratio worsened slightly to 80.1 compared with 79.7 in fourth-quarter 2001.

For the year, UP earned $1.3 billion in net income, which increased 39 percent compared with 2001's $966 million. The railroad's operating income jumped 12 percent to $2.3 billion and operating revenue rose 4 percent to $12.4 billion compared with the prior year.

And UP's yearly operating ratio improved to 79.8 compared with 2001's 81.4.

"Our 2002 earnings performance accelerated our ability to strengthen the balance sheet and position ourselves for continued long-term growth," said Davidson. "We would expect moderately improved revenue growth throughout [2003], but we're concerned about the potential impact of an
uncertain economy and high energy prices."

Those concerns have prompted UP to try to cut 20 percent of its costs in 2003.

Part of the cuts will impact the railroad's workforce. UP plans to lay off about 300 workers by the end of the first quarter and leave open 700 positions affected by attrition through the year.

Contact Progressive Railroading editorial staff.

More News from 1/23/2003