UP reports strong first quarter results

Union Pacific profit rose 24 percent in first quarter 2011 compared with first quarter 2010, the railroad reported April 20. This follows a 47 percent jump in Union Pacific profit for calendar-year 2010.

UP Chairman Jim Young said the railroad would increase its 43,000 employee headcount by about 4,500 in 2011.

The railroad reported a best-ever first quarter operating ratio of 74.7 percent — one of the more difficult for railroads because of winter weather. The fourth quarter 2010 UP operating ratio was 73.2.

Operating ratio is a railroad’s operating expenses expressed as a percentage of operating revenue, and is considered by economists to be the basic measure of carrier profitability. The lower the operating ratio, the higher is profit.

Looking forward, UP Chairman Jim Young predicted significant volume growth in the second half of 2011. UP is “pretty confident right now we’re going to see a peak” that exceeds traffic volumes the second half of 2010, Young said. “We’ve started off strong in 2011 by achieving record results in the first quarter.”

Union Pacific operates some 32,000 route miles in 23 states in the western two-thirds of the U.S.