WASHINGTON (dpa-AFX) - Railroad operator Union Pacific Corp. (UNP), Thursday reported a 14 percent increase in first-quarter profit, due mainly to its shipping more of agricultural, coal and industrial products. Quarterly earnings topped Wall Street estimates by a penny, while revenue fell short of expectations.
Moving forward, Union Pacific said prospects for the year appear bright.
CEO Jack Koraleski said the quarterly results were despite harsh weather conditions in the U.S.
'As we look forward, we're watching the economy very closely, as well as the potential impacts of weather, particularly on our coal and grain business,' Koraleski said.
Performance of railroad operators is seen as an indicator of economic activity because of the vast range of products they transport. The U.S. economy is seeing some expansion and it bodes well for companies like Union Pacific.
Omaha, Nebraska-based Union Pacific reported first-quarter net income of $1.1 billion or $2.38 per share, compared with $957 million or $2.03 per share last year. On average, 24 analysts polled by Thomson Reuters expected earnings of $2.37 per share for the quarter. Analysts' estimates typically exclude one-time items.
Revenues for the quarter climbed to $5.64 billion from $5.3 billion in the prior year. Seventeen analysts had a consensus revenue estimate of $5.7 billion for the quarter.
During the quarter, business volumes, as measured by total revenue carloads, climbed 5 percent from a year ago.
Agricultural products shipments grew 16 percent from last year, industrial products were up 10 percent and coal shipments climbed 3 percent. Intermodal shipments were up 4 percent.
Chemicals volumes were flat compared with last year, as growth in base chemicals was offset by reduced crude oil shipments.
Operating ratio for the quarter improved to 67.1 percent from 69.1 percent a year ago.
Union Pacific stock is trading at $187.32, down $0.83 or 0.44%, on a volume of 1.4 million shares on the NYSE.
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