Union Pacific (UNP 108.69, +0.85) has climbed 0.8% in pre-market after beating second quarter expectations.
The rail carrier reported above-consensus earnings of $1.45 per share on a 10.1% year-over-year spike in revenue to $5.25 billion, which also exceeded expectations.
Second quarter business volumes, measured by total revenue carloads, grew 5.0% year-over-year. Higher volumes in coal, industrial products, agricultural products, and intermodal outweighed declines in chemicals and automotive shipments.
Revenue from shipments of industrial products increased 24.0% to $1.03 billion while revenue carloads grew 15.0% to 315,000. Average revenue per car increased 8.0% to $3,271.
Intermodal revenue grew 3.0% to $939 million while Intermodal revenue carloads increased by 2.0% to 824,000. Average revenue per car increased 1.0% to $1,140.
Agricultural Products revenue increased 7.0% to $907 million. Revenue carloads grew 3.0% to 237,000 while average revenue per car rose 3.0% to $3,813.
Chemicals revenue rose 4.0% to $898 million while revenue carloads declined 2.0% to $269,000. Average revenue per car increased 6.0% to $3,334.
Coal revenue jumped 25.0% to $619 million while revenue carloads rose 17.0% to 285,000. Average revenue per car rose 7.0% to $2,173.
Automotive revenue increased 5.0% to $907 million while revenue carloads declined 1.0% to 215,000. Average revenue per car grew 6.0% to $2,393.
Operating ratio improved by 340 basis points year-over-year to 61.8%. Higher fuel prices boosted the operating ratio by 50 basis points.
Volume growth, increased fuel surcharge revenue, core pricing gains, and positive mix of traffic contributed to growth in freight revenue.
Quarterly train speed declined 5.0% year-over-year to 25.4 mph while the company's reportable personal injury rate for the first half rose to 0.76 per 200,000 employee hours from a record of 0.70 one year ago.
Looking ahead, Union Pacific expects that absolute business volumes should show an improvement in the second half when compared to results from the first half of 2017, but that year-over-year comparisons will be more challenging. The company expects this dynamic will allow for focus on growth opportunities.