By Dow Jones Business News, October 17, 2013, 08:44:00 AM EDT
By Nathalie Tadena
Union Pacific Corp.'s ( UNP ) third-quarter earnings rose 10% as pricing gains boosted the railroad operator's revenue,
though volumes were flat.
In the latest period, volume growth from industrial products, automotive and chemical shipments were offset by
declines in coal, agricultural products, and intermodal shipments.
Railroad companies have broadly been hurt by a slump in coal demand from domestic utilities as a result of low-cost
natural gas and high coal stockpiles. In the most recent quarter, mild weather and disruptions from flooding in Colorado
tempered Union Pacific's coal volumes and, to a lesser extent, other commodity shipments while an uncertain economic
environment continued to hurt intermodal volumes.
However, the company, which also transports steel, sand and pipe to drilling sites and then hauls out the resulting
crude oil, has benefited from an increase in demand from oil-and-gas producers and pricing gains.
In the latest quarter, overall carload volume was flat from a year earlier though average revenue per carload rose
4.7%. The company said core pricing gains drove revenue growth for the quarter.
Shipments of coal, which have been weak in recent quarters as low natural-gas prices hurt demand for coal used to
generate electricity, were down 6.6%. Chemical shipments, which include crude shipments, were up 2.5%. Automotive
shipments climbed 7.7%.
Overall, Union Pacific reported a profit of $1.15 billion, or $2.48 a share, up from $1.04 billion, or $2.19 a share,
a share, a year earlier. Operating revenue rose 4.3% to $5.57 billion.
Union Pacific issued downbeat guidance earlier this quarter, projecting earnings between $2.45 to $2.48 a share on 4%
to 4.5% operating revenue growth.
Operating ratio improved to 64.8%, a quarterly record.
Shares closed at $157.16 and were inactive premarket. Through the close, the stock is up 25% since the start of the
Write to Nathalie Tadena at email@example.com
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