Union Pacific sets all-time quarterly record for operating ratio

[Bob]

Union Pacific sets all-time quarterly record for operating ratio

Union Pacific (NYSE: UNP) eked out an all-time quarterly record operating ratio (OR) in the third quarter despite a 11% drop in operating revenue.

Union Pacific’s (UP) OR was 58.7% for the quarter, compared with 59.5% in the third quarter of 2019, amid lower fuel prices.

Union Pacific sets all-time quarterly record for operating ratio - FreightWaves

Lower fuel prices drove Union Pacific’s operating ratio lower. Meanwhile, third-quarter net profit fell 12% year-over-year.

www.freightwaves.com

 

[bnsf971]

I remember the "good old days", when an OR in the high 80's was considered exceptional.

 

[CGW101c]

Would somebody explain operating ratio please? Price of Operating vs profit?

 

[Bob]

Would somebody explain operating ratio please? Price of Operating vs profit?

Per the article:

" Investors sometimes use OR, which is operating expenses as a percentage of revenue, to gauge the financial health of a company. A lower OR implies improved financial health. "

 

[Bob]

I remember the "good old days", when an OR in the high 80's was considered exceptional.

Low operating ratios can often indicate gaining short term profits while neglecting long term maintenance and improvements. It's not always a good thing, but far too many investors don't look past the numbers.

 

[bnsf971]

Low operating ratios can often indicate gaining short term profits while neglecting long term maintenance and improvements. It's not always a good thing, but far too many investors don't look past the numbers.

Investors are only interested in Next Quarter.
Just before Santa Fe merged with BN, Santa Fe’s Operating Ratio stood at 96.