Jan 23 Union Pacific Corp reported a
bigger quarterly profit on Thursday as the railroad raised
prices and saw demand grow in overall shipments, sending shares
up almost 4 percent.
Union Pacific, which describes itself as North America's
premier railroad franchise, earned $1.2 billion, or $2.55 a
share, in the fourth quarter of 2013, compared with $1 billion,
or $2.19 a share, a year earlier.
Analyst Justin Yagerman of Deutsche Bank said most of the
railroad's strong numbers were driven by pricing. Core pricing
at the company rose 3.5 percent over last year.
Railroads are key indicators of the health of an economy
because of the variety of goods they transport. Union Pacific
Railroad connects 23 states in the western two-thirds of the
country by rail.
Chief Executive John Koraleski said in an interview that the
economy was growing at a strong, steady rate, and the momentum
was continuing into 2014.
"Thing I'm most excited about is the industrial sector," he
Koraleski said that in the fourth quarter besides
automobiles, shipments of frack sand, metals and lumber had
"When you put that into perspective: automobiles, lumber,
metals, you are talking about some of the fundamental building
blocks of the U.S economy," the CEO said.
Like others in the industry, Union Pacific has been hit by a
weakening demand for coal, but it took advantage of a rise in
demand for agricultural goods, autos and other industrial
The company's revenue from transporting agricultural goods
surged 19 percent in the quarter, followed by automotives with
growth of 17 percent. Only coal revenue fell, by one percent.
Coal is the company's biggest cargo.
Overall revenue was $5.6 billion, compared with $5.25
billion in the fourth quarter of 2012.
Rival Norfolk Southern Corp reported a 24 percent
increase in fourth-quarter earnings on Wednesday, beating
analysts' expectations, as strong chemicals, construction
materials and auto shipments offset a dip in coal volumes.
Shares of the Omaha, Nebraska-based company were up 3.5
percent at $174.32 Thursday on the New York Stock Exchange. They
had earlier touched a high of $174.80, their best level in a