Union Pacific profits rise 7% as investors feel good about industry, CSX also reports

OMAHA, Neb. (AP) — Union Pacific Co.’s fourth-quarter profit rose 7% as the company managed to deliver more freight with fewer workers and continued to improve rail efficiency.

The Omaha, Neb.-based railroad reported profit of $1.76 billion, or $2.91 a share, on Thursday, handily beating Wall Street expectations. That’s up from $1.65 billion, or $2.71 per share, a year ago. The railroad improved its bottom line despite additional one-time costs from buying out some brake personnel, which added $40 million to costs.

Wall Street expected Union Pacific to earn an average of $2.80 per share, according to analysts polled by FactSet Research.

“It’s been a very successful year for the Union Pacific team, and we really ended the year on a high note in the fourth quarter,” said CEO Jim Vena.

Revenue fell 1% in the quarter to $6.12 billion despite volume growth of 5%, as most of the additional shipments were intermodal and margins were lower than in coal and other categories. Analysts expected the railroad’s revenue to be $6.15 billion.

Union Pacific said it is on track to achieve its long-term goal of growing earnings per share in the high single digits to low double digits over the next three years.

CSX, one of the other four major freight railroads, will report results Thursday afternoon. Analysts expected CSX to earn 42 cents per share on revenue of $3.5578 billion.

CSX began the quarter dealing with the aftermath of hurricanes Helen and Milton in the Southeast, but officials said when reporting third-quarter results in October that it was able to quickly resume train operations after those storms.

CSX and Union Pacific are the two largest railroads in the United States, with CSX serving the eastern United States and UP operating in the west.