Union Pacific Shares Chug to All-Time High Amid 2Q Beat

By Features FOXBusiness

Shares of Union Pacific (UNP) climbed 3.1% to an all-time high after the railroad company reported a second-quarter profit that topped Wall Street expectations and a ramp up in volumes across all but one of its business segments. 

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While five of Union Pacific’s six businesses reported freight revenue growth in the second quarter with the help of pricing gains and improved fuel prices, a 17% decline in coal volumes kept total volumes only slightly higher year-over-year.

Revenue for the three-month period was $5.22 billion, up 7% from $4.86 billion a year ago, narrowly below the Street’s view of $5.23 billion. Freight revenues jumped 25% in Union Pacific’s automotive group, 14% in its industrial products segment and 13% in chemicals.

The Omaha, Neb.-based transportation giant reported net income of $1 billion, or $2.10 a share, compared with a year-earlier $785 million, or $1.59 a share. That topped average analyst estimates of $1.97 in a Thomson Reuters poll.

"When combined with solid pricing, efficient network operations and continued productivity gains, the net result was our best-ever quarter by nearly every financial measure," Union Pacific CEO Jack Koraleski said in a statement.

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Expenses rose a modest 1% as declines in compensation, benefits and fuel costs helped offset increases in purchased materials, equipment and depreciation. Average quarterly diesel fuel prices fell by 2% to $3.21 a share compared with $3.29 a gallon in the same 2011 period.

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Looking ahead, Koraleski said coal volumes “remain a challenge.”