* Fourth-quarter EPS $2.19 beats est of $2.16
* Volumes down 2 percent
* 2013 will see many of the same challenges as last year -
By A. Ananthalakshmi
Jan 24 Union Pacific Corp, the No.1 U.S.
railroad, reported a quarterly profit above analyst estimates as
higher pricing helped to make up for a fall in volumes but it
warned of a tough 2013.
Railroads have been hit by lower shipments of coal, both for
domestic and export, due to low natural gas prices, high
stockpiles and weak global demand. Shipments of grains and other
agricultural commodities have also been weak due to drought.
"We are cautious on the economic outlook for this year,"
Chief Financial Officer Rob Knight said on a post-earnings
conference call. "We are expecting to see many of the same
challenges we faced last year."
Coal and agriculture products are expected to be the biggest
challenges this year, the company said.
Union Pacific expects first-quarter coal volumes to decline
in the mid-teens and agriculture volumes to be down in the high
CFO Knight said he sees a potential for slightly positive
volume growth in 2013 if industrial production in the United
States expands the projected 2 percent, as it would help offset
the weakness in coal.
The company was closely watching developments in Washington
and how it impacts economic growth, he said.
CSX Corp, Union Pacific's closest publicly traded
rival, said on Wednesday a return to volume growth was dependent
on how soon Washington agreed on a long-tem fiscal plan as the
uncertainty was affecting business and consumer confidence.
Omaha, Nebraska-based Union Pacific's shipment volumes fell
2 percent in the fourth quarter.
Volume declines in coal and agricultural products more than
offset growth in chemicals, automotive and intermodal shipments,
the company said.
Net income rose to $1.04 billion, or $2.19 per share, in the
fourth quarter, from $964 million, or $1.99 per share, a year
Operating revenue rose 3 percent to $5.25 billion.
Analysts expected earnings of $2.16 per share on revenue of
$5.31 billion, according to Thomson Reuters I/B/E/S.
Union Pacific's shares, which have gained about 25 percent
since the beginning of 2012, fell slightly to $134.73 on the New
York Stock Exchange on Thursday.