Union Pacific Fourth Quarter Results Top Estimates

(RTTNews) - Railroad company Union Pacific Corp. (UNP) reported Thursday a profit for the fourth quarter that increased 22 percent from last year, reflecting improved freight revenues amid volume growth and core pricing gains. Earnings per share and quarterly revenues topped analysts' expectations.

Results from the largest railroads are considered a bellwether of the broader economy - the rise in shipping volumes suggest the U.S. economy is picking up steam.

"Union Pacific achieved record quarterly financial results, driven by strong volumes, solid core pricing and productivity gains," CEO Jack Koraleski said in a statement.

The Omaha, Nebraska-based 151-year-old operator of the largest railroad in North America reported net income of $1.43 billion or $1.61 per share for the fourth quarter, higher than $1.17 billion or $1.27 per share in the prior-year quarter.

On average, 26 analysts polled by Thomson Reuters expected the company to report earnings of $1.51 per share for the quarter. Analysts' estimates typically exclude special items.

Total operating revenues for the quarter grew 9 percent to $6.15 billion from $5.63 billion in the same quarter last year, and topped nineteen Wall Street analysts' consensus estimate of $6.10 billion.

Freight revenues increased 9 percent to $5.79 billion, driven by volume growth and core pricing gains, with five of its six business groups reporting revenue growth. Other revenues grew 8 percent to $359 million from last year.

Business volumes, as measured by total revenue carloads, increased 6 percent from last year to 2.42 million carloads, with increases in all six business groups, led by growth in industrial products and coal. Average revenue per car load also grew 3 percent to $2,390 from last year.

Operating ratio for the quarter improved 3.6 percentage points to a all-time quarterly record of 61.4 percent from last year. The company noted that the net impact of lower fuel prices contributed about 1.5 points of this improvement.

Operating income for the quarter increased 20 percent to $2.37 billion from the prior-year quarter. Total operating expenses were $3.78 billion, up 3 percent from the year-ago quarter, with fuel expenses decreasing 10 percent to $813 million from last year.

"We're entering the year well-resourced and we're looking forward to safely providing efficient, value-added service for our customers, and increasing returns for our shareholders in 2015," Koraleski added.

UNP closed Wednesday's regular trading session at $114.40, down $0.15 on a volume of 4.76 million shares.