Union Pacific’s profit increased 7 percent in Q4, and forecasts similar growth in 2025
Union Pacific reported fourth-quarter 2024 net income of $1.8 billion, up from $1.7 billion a year earlier.
The largest Class 1 railroad (NYSE: UNP ) reported full-year 2024 net income of $6.7 billion, up from $6.4 billion in 2023.
“We had a very successful year in 2024,” CEO Jim Vena said on a call with analysts and media.
It was an amazing end to 2024.
In the fourth quarter ended Dec. 31, operating income of $6.1 billion was down 1% from fuel surcharges and an unfavorable business mix, partially offset by volume increases and core price gains.
Intermodal traffic increased 16% in the quarter, although average revenue per car declined 9% y/y.
Global intermodal volumes increased 26% on import demand, outpacing strong container flows through West Coast ports.
Domestic intermodal grew as the railroad moved away from trucks.
Import truckloads increased 5%, fertilizers increased 3%, and grain and chemicals increased 8%.
Coal revenue continued its long-term decline, down 29% in the quarter, but UP expects to partially offset that in 2025 with a new contract with Texas’ Lower Colorado River Authority.
Grain has benefited from good yields and a strong export business to Mexico, while demand for plastics is growing, said Kenny Rocker, executive vice president of marketing and sales. “There was soft demand in construction materials, sand and stone. We are actively monitoring tariff changes that may affect volumes. We expect a soft economic environment in 2025.”
It is expected that the cargo volume will be reduced by 1.5 billion dollars with the project development that has just started. The Gulf Coast is a limited target in that area.
The operating ratio was 58.7%, an improvement of 220 basis points, which included an unfavorable 70 basis point impact from the approval of a new union contract.
Operating income rose 5 percent to a record $2.5 billion.
“There are a lot of unknowns in 2025 — fares, regulatory changes, interest rates — but that’s what I’ve been doing in my forty-plus years in railroading,” said Vena, who started his career as a railroad worker. ‘ Making dividend growth in the high single digits to low double digits in 2025 We are waiting.