Shares of Union Pacific (NYSE: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.
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.
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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.
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.
Looking ahead, Koraleski said coal volumes “remain a challenge.”