Union Pacific hauled in 22% more profit during the first quarter because it charged more and delivered 4% more shipments even as it struggled to clear up congestion along its rail network.
OMAHA, Neb. — Union Pacific hauled in 22% more profit during the first quarter because it charged more and delivered 4% more shipments even as it struggled to clear up congestion along its rail network.
The Omaha, Nebraska, railroad said Thursday it earned $1.6 billion, or $2.57 per share, in the quarter. That’s up from $1.3 billion, or $2 per share, a year ago.
The results surpassed Wall Street expectations. The average estimate of seven analysts surveyed by Zacks Investment Research was for earnings of $2.55 per share.
Union Pacific’s Chairman, President and CEO Lance Fritz said the railroad delivered solid financial results but failed to meet customer expectations for service. Federal regulators plan to hold a hearing next week after several groups of shippers complained about delayed deliveries that disrupted their business.
Fritz reiterated that the railroad is hiring aggressively, bringing more locomotives out of storage and putting limits on some shipments to help get freight moving smoothly again. During the quarter, Union Pacific said the average speed of its trains fell 4% to 24.1 mph.
But the railroad’s quarterly revenue grew 17% to $5.86 billion as it increased the rates it charged to deliver an assortment of raw materials, crops and finished products. That also surpassed the $5.81 billion that five analysts surveyed by Zacks predicted.
Union Pacific maintained its prediction that volume will grow faster this year than industrial production.
Union Pacific is one of the nation’s largest railroads with a network of 32,400 miles (52,000 kilometers) of track in 23 Western states.