Union Pacific rate hikes boost first-quarter railroad profits 22%



OMAHA, Neb. (AP) – Union Pacific made 22% more profit in the first quarter as it billed more and delivered 4% more shipments, even as it struggled to clear congestion along its network railway.

The Omaha, Nebraska Railroad on Thursday reported earning $1.6 billion, or $2.57 per share, in the quarter. That’s up from $1.3 billion, or $2 per share, a year ago.

The results exceeded Wall Street expectations. The average estimate of seven analysts polled by Zacks Investment Research was for earnings of $2.55 per share.

Union Pacific Chairman and CEO Lance Fritz said the railroad delivered strong financial results but failed to meet customer service expectations. Federal regulators plan to hold a hearing next week after several shipper groups complained about shipping delays that disrupted their business.

Fritz reiterated that the railroad is aggressively hiring, pulling more locomotives from storage and placing limits on some shipments to help get freight moving smoothly again. During the quarter, Union Pacific said its average train speed dropped 4% to 24.1 mph.

But the railroad’s quarterly revenue rose 17% to $5.86 billion as it raised the rates it charged to deliver an assortment of raw materials, crops and finished goods. It also topped the $5.81 billion that five analysts surveyed by Zacks had predicted.

Union Pacific stuck to its prediction that volume will grow faster this year than industrial production.

Union Pacific is one of the nation’s largest railroads with a network of 32,400 miles (52,000 kilometers) of track in 23 western states.


Material for this story was generated by Automated Insights (http://automatedinsights.com/ap) using data from Zacks Investment Research. Access a Zacks stock report on UNP at https://www.zacks.com/ap/UNP


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