Union Pacific Boosted by Easing Commodities Slump -- Update
January 19 2017 - 10:08AM
Dow Jones News
By Ezequiel Minaya
Union Pacific Corp. said slumping demand for the commodities it
transports eased in the fourth quarter, helping the company post a
better-than-expected profit.
"While full-year volumes were down substantially year over year,
we did see declines moderate in the fourth quarter," said Chief
Executive Lance Fritz.
The Omaha, Neb., company's shares, up 40% over the past 12
months, rose 4% to $108.25 in early trading.
Fourth-quarter total revenue carloads slipped 3% compared with
2015. Freight revenue for coal retreated 6% in the fourth-quarter
to $699 million, compared with 25% for the year. Revenue for the
industrial products segment fell 2% compared with 12% annually. The
Intermodal business, which moves freight using a combination of
trains and trucks, were nearly flat at $969 million, an improvement
to the 9% slide tallied for the year.
"Higher energy prices, favorable agricultural markets and
improving business and consumer confidence all support a return to
positive volume growth this year," Mr. Fritz said.
Over all, Union Pacific reported a profit of $1.14 billion, or
$1.39 a share, up from $1.11 billion, or $1.31 a share, a year
earlier. Revenue was nearly flat, retreating less than 1% to $5.17
billion.
Analysts polled by Thomson Reuters expected per-share profit of
$1.33 and revenue of $5.1 billion.
Commodity demand in 2017 will be shaped by the opposing trends
of a moderate slowdown in Chinese housing versus growth in the
other major industrial economies.
The J.P. Morgan/Markit global manufacturing PMI hit a 34-month
high in December, with the U.S., Japanese, German, and eurozone
PMIs all notching their highest marks in a year or more, building
on a sustained uptrend visible since at least September.
Other railways have seen improving results. On Tuesday, CSX
Corp. posted a 9.2% climb in revenue with coal shipments rising
8.3%. Canadian Pacific Railway Ltd. fell shy of Wall Street
expectations but its quarterly shipment volumes were highlighted by
growth in its domestic and international container-shipment lines,
the railroad's main revenue driver.
Nathaniel Taplin, Anne Steele and David George-Cosh contributed
to this article
Write to Ezequiel Minaya at ezequiel.minaya@wsj.com
(END) Dow Jones Newswires
January 19, 2017 09:53 ET (14:53 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
Union Pacific (NYSE:UNP)
Historical Stock Chart
From Aug 2024 to Sep 2024
Union Pacific (NYSE:UNP)
Historical Stock Chart
From Sep 2023 to Sep 2024