(In Oct 17 item, corrects paragraph four to attribute quote to
CFO Rob Knight instead of executive vice president of operations
Oct 17 Union Pacific Corp said on
Thursday that it expected its freight rates to rise more slowly
in 2014 than this year, sending its shares down more than 3
The U.S. railroad posted higher third-quarter revenue as it
raised rates by an average of 3.5 percent, but overall volume
"The outlook for the fourth quarter and 2014 is muted, and
the rate of core pricing growth is decelerating," said R.W Baird
analyst Benjamin Hartford. The company did not give an earnings
forecast for the year.
On a conference call with analysts, chief financial officer
Rob Knight said Union Pacific did not expect pricing gains next
year to match those of 2013.
Railroads are seen as key indicators of how an economy is
doing because of the variety of goods they transport.
The companies have suffered from a slump in coal shipment
volumes as demand for natural gas has increased. For Union
Pacific, a mild summer and flooding in Colorado hurt its coal
Shipments rose 8 percent for automotive products and 9
percent for industrial products.
Retailers proceeded cautiously with order volumes in the
quarter, Eric Butler, executive vice president of marketing and
sales, said on the call.
"Our current outlook is for the economy to continue its slow
improvement, although there is uncertainty in the marketplace,"
Union Pacific, the largest publicly traded U.S. railroad,
said coal volumes fell 7 percent, matching the decline at
smaller rival CSX Corp.
Butler said the company expected full-year coal volumes to
be down in the high single-digit percentage range, in part
because of a lost contract.
Union Pacific, which links 23 states in the West and
Midwest, said it had earned $1.15 billion, or $2.48 a share, up
from $1 billion, or $2.19 a share, a year earlier.
Analysts on average were expecting a profit of $2.47 a
share, according to Thomson Reuters I/B/E/S.
Revenue for the Omaha, Nebraska-based company rose 4 percent
to $5.6 billion, compared with analysts' estimates of $5.58
The company's shares were down 3.3 percent at $152.01 on the
New York Stock Exchange.
(Reporting by Nivedita Bhattacharjee in Chicago; Editing by
John Wallace and Lisa Von Ahn)