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Rail News: Union Pacific Railroad

Union Pacific posts operating revenue, income gains in Q2


Union Pacific Railroad today reported second-quarter 2022 operating revenue jumped 14% to $6.3 billion and operating income climbed 1% to $2.5 billion compared with the same period a year ago despite service problems that have plagued the major Class Is in recent months.

UP reported Q2 net income of $1.8 billion, or $2.93 per diluted share, compared with $1.8 billion, or $2.72 per diluted share, a year ago.

UP's operating revenue increase was driven by higher fuel surcharge revenue, core pricing gains and a positive mix, offset slightly by volume declines, UP officials said in a press release.

Business volume, as measured by total revenue carloads, was down 1% during the quarter.

"As anticipated, the second quarter was a tough one as we limited carloadings and increased expenses to recover network fluidity," said UP Chairman, President and CEO Lance Fritz. "We also experienced record high fuel prices and increasing inflation, adding pressure to our total costs."

In addition to fuel surcharges, price increases and a positive business mix, cost increases were offset by continued train size initiatives, Fritz said.

"The result was operating revenue and income growth. Our network fluidity improved through the quarter, and we are positioned to grow volumes in the back half of 2022 while continuing to improve our service product," he added.

The railroad's operating ratio in the quarter clocked in at 60.2% compared to 55.1% a year ago.

Also for Q2 2022, UP reported:

• freight-car velocity of 187 daily miles per car, a 12% decline;

• locomotive productivity at 123 gross ton-miles (GTMs) per horsepower day, a 12% drop;

• average maximum train length at 9,439 feet, which was flat;

• workforce productivity at 1,034 car miles per employee, down 2%; and

• fuel consumption rate of 1.076, measured in gallons of fuel per thousand GTMs, also flat.

The railroad's reportable personal injury rate in the first half of 2022 improved to 0.93 per 200,000 employee-hours compared to 0.95 during the same period in 2021.

In updated guidance for the remainder of the year, UP's first-half 2022 results will challenge the previously reported full-year volume and operating ratio targets, company officials said. UP now expects a full-year operating ratio of 58%. 

Also, stronger volumes in the second half should produce full-year carload growth of 4% to 5%, UP officials said.

Contact Progressive Railroading editorial staff.

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