Union Pacific (UP) reported net income of $US 1.1bn, down from $US 1.6bn during the same period last year. Operating revenue was $US 4.2bn, down 24% compared with 2019, while total revenue wagonloads decreased by 20%.

“The second quarter proved very challenging as we faced a volume decline of 20% due to the economic impact of the Covid-19 pandemic,” says Mr Lance Fritz, UP chairman, president and CEO. “Demonstrating the transformation our company is experiencing through the implementation of Unified Plan 2020, we were able to largely mitigate the impact of that volume loss.”

With uncertainty in the state of the global economy, UP currently expects full year wagon volumes to be down by around 10% compared with 2019.  

Canadian Pacific (CP) announced second-quarter revenues of $US 1.79bn for the quarter, down 9% from $US 1.98bn year-on-year, with an operating ratio of 57%.

“While economic uncertainty remains, we’re controlling what we can control - our costs,” says Mr Keith Creel, CP president and CEO. “Our strong bulk franchise, which included record movements for Canadian grain and potash in the first half of the year, helped to offset some of the declines we experienced in other lines of business. Given our strong cost control measures, industry-leading execution of the PSR model, and improved clarity on the volume environment, we now expect positive adjusted diluted earnings per share (EPS) growth for the year. As a result of the continued strength of our balance sheet, we have also restarted our share repurchase program.”

CP continues to expect capital expenditures of $US 1.6bn and a mid-single digit decline in revenue tonne-km.

“The completion of our recent acquisition of the Central Maine and Québec Railway, combined with our continuing pipeline of unique growth opportunities, provides me with optimism for the remainder of 2020 and into 2021,” Creel says.

CSX announced second quarter net earnings of $US 499m, down from $US 870m. Revenue decreased 26% to $US 2.26bn, primarily due to the lower economic activity driven by the Covid-19 pandemic. Expenses decreased 19% percent year-on-year to $US 1.43bn, driven by volume-related reductions and continued efficiency gains. Operating income declined 37% to $US 828m, compared with $US 1.31bn over the same period last year.

Canadian National (CN) reported revenue of $C 3.2bn ($US 2.39bn), a 19% decrease from $C 3.2bn in the second quarter. The decrease was mainly attributed to lower volumes across most commodity groups caused by the Covid-19 pandemic and lower applicable fuel surcharge rates, which were partly offset by increased shipments of Canadian grain, higher Canadian coal exports via west coast ports and freight rate increases.

Operating expenses increased by 6% to $C 2.42bn, mainly driven by a loss on assets held for sale resulting from CN’s decision to sell on-going rail operations, certain non-core lines, and partly offset by lower fuel and labour costs. Excluding this one-time charge, operating expenses were down 15% versus last year.

“By being adaptable, we were able to swiftly right-size our resources and continue to provide our essential transportation services to our customers, the economy, and the communities we serve,” says CN president and CEO, Mr J J Ruest. “The decisive actions we took early on in March, well before the pandemic impacted the North American economy, allowed us to deliver over $C 1bn of free cash flow during this recessionary quarter.

“I'm pleased to reaffirm our commitment in encouraging the economic recovery through our $C 2.9bn capital investment plan for 2020 as well as our new investment announcement of the purchase of approximately 1500 new, efficient, high-capacity, covered hopper cars to expand our grain export business for delivery starting in January of 2021. Our strategic long-term approach to investments, together with our continued focus on cost and deployment of innovative technology, as well as our commitment to enabling trade, position us to keep delivering long-term value to our stakeholders.”

Kansas City Southern (KCS) reported second quarter revenues of $US 547.9m, a 23% decrease from 2019. Overall, freight wagon volumes were down 21% year-on-year. Operating expenses were $US 367.5m, including $US 10.5m of restructuring charges. Operating income was $US 180.4m and KCS reported an operating ratio of 67.1%. Second quarter net income was $US 110.3m.

Due to the economic uncertainty created by the pandemic, KCS is not currently providing guidance on revenue, volume, operating ratio or earnings per share. The guidance for 2021 and 2022 capital expenditure remains at around 17% of revenue.

“KCS demonstrated excellent execution during an extremely challenging quarter,” says president and CEO, Mr Patrick Ottensmeyer. “Our network experienced a rapid decline in volumes followed by an unprecedented rebound, forcing us to quickly adjust our service model to match customer demand while optimising our cost structure.

“Precision Scheduled Railroading (PSR) is producing sustainable improvements to customer service and operations, and has been a key contributor to the company’s strong cost performance this quarter. Although visibility into second half volumes and revenue remains limited, the company is focused on retaining the efficiencies gained during the second quarter, and reiterates its outlook to deliver at least $US 500m free cash flow in 2020. We are confident in our operational execution, and believe KCS will emerge from these challenging times even better positioned to deliver superior growth and shareholder returns.”

Norfolk Southern is due to announce its second quarter results on July 29, while BNSF is also yet to announce its results.