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Union Pacific Q3 earnings up on pricing, fuel recoveries

Published: 16:25 20 Oct 2011 BST

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Railroad operator Union Pacific (NYSE:UNP) Thursday reported higher third-quarter results driven by higher fuel cost recovery and pricing gains, topping Wall Street estimates.

For the three months that ended September 30, net profit rose to $904 million, or $1.85 per share, from $778 million, or $1.56 per share, a year ago. Analysts, on average, expected $1.81 per share, according to Thomson Reuters.

Revenue in the quarter grew 16 percent to $4.8 billion from $4.2 billion last year. Each of Union Pacific's six business groups reported freight revenue growth in the third quarter.

Union Pacific chairman and CEO, Jim Young, said: "Union Pacific delivered top and bottom line record results in the third quarter. We're clearly demonstrating how Union Pacific's diverse franchise and value-added service offerings are driving record free cash flow and improved financial returns for our shareholders."

Operating revenue increased 16 percent to a record $5.1 billion, topping Wall Street expectations for $5.01 billion.
Volume, as measured by revenue carloads, rose 1 percent from a year earlier. Volume rose slightly as higher shipments of automotive and industrial products, energy and chemicals offset declines in agricultural products and intermodal business, the transportation of container goods that can be moved from one form of transport to another, such as from a truck to a train.

Union Pacific's network links 23 states in the western two-thirds of the US. The company also connects with the rail systems of Canada and Mexico. Shares in the railroad company were up 3.7 percent to $94.40 Thursday morning.

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