Union Pacific reported fourth quarter net income of $1.7 billion, an increase of 1% compared to the previous year.
Operating revenue was flat at $6.2 billion, with increased volumes and core pricing gains offset by lower fuel surcharge revenue and business mix.
The operating ratio improved by 10 basis points to 60.9%, demonstrating strong sequential improvement from the third quarter.
The company expects a muted macroeconomic environment in 2024, with uncertainties surrounding economic indicators and inflationary pressures.
Volume outlook for 2024 is uncertain, but Union Pacific aims to maximize available demand through business development and value creation.
Capital spending for 2024 is targeted at $3.4 billion, focusing on infrastructure investments, technology initiatives, and intermodal expansion.
Other key points:
Pricing will be crucial to overcome ongoing inflationary pressures, although specific guidance on margins was not provided.
The loss of an international intermodal contract earlier in 2023 will have a negative impact on 2024 volumes.
The company remains committed to maintaining a strong balance sheet and returning excess cash to shareholders through dividends and share repurchases.
Challenges include headwinds from lost business, low natural gas prices impacting coal demand, and potential softness in certain markets.
The team is focused on improving safety, service, and operational efficiency to drive future success.