(The Associated Press circulated the following article on March 14.)
OMAHA, Neb. — Union Pacific Corp., the nation’s largest railroad operator, said Tuesday its first-quarter earnings will be better than predicted because of strong demand for commodity products and robust profit margins.
The railroad now expects commodity revenue to grow 17 percent in the first quarter compared to last year, with earnings per share between $1 and $1.10.
Previously Union Pacific had predicted revenue would grow 15 percent over last year in the first quarter with earnings per share between 80 cents and 90 cents.
The Omaha-based company also increased its earnings outlook for the full year to between $4.80 and $5 per share, up from $4.60 to $4.80.
Analysts surveyed by Thomson Financial were looking for earnings per share of 89 cents for the first quarter and $4.79 for the year.
Union Pacific made its announcement after the markets closed Tuesday. Its shares fell 49 cents to close at $85.21 on the New York Stock Exchange, but then added 3.3 percent, or $2.82, in after-hours trading.
Strong demand for industrial and agricultural products fueled the growth in the railroad’s revenue even though coal volumes have been lower than expected. Railroad officials said mine production issues, especially in Colorado, are the main reason coal volume is down.
Mild winter weather also helped the railroad during the first quarter, as did network management initiatives and capacity improvements.
”We are very pleased by both the robust demand for our rail services and our ability to move record first-quarter volumes more efficiently,” said Jim Young, Union Pacific’s chief executive and president.
Union Pacific operates 38,654 miles of track in 23 states from the Midwest to the West and Gulf coasts.