Union Pacific profit rises as pricing offsets cost pressures

Union Pacific reported an increase in third-quarter adjusted profit on Thursday, October 22, as stronger core pricing and higher fuel surcharge revenue outweighed cost pressures, according to Economic Times Markets. The US railroad posted operating revenue of $7.2 billion for the quarter ended September 30, up from $6.24 billion a year earlier.

Higher energy prices linked to the Middle East conflict have increased fuel expenses for transport businesses. Union Pacific said fuel prices had an adverse effect of 140 basis points on its operating ratio, which stood at 59.1% for the quarter. The ratio measures operating expenses as a share of revenue; a lower figure generally indicates greater operating efficiency.

The report described pricing discipline and operational efficiencies as supporting profitability across US railroads despite rising costs. It also linked more reliable services and smoother freight movement through rail networks to attracting additional shipments and retaining customers.