OMAHA — Union Pacific Corp., benefiting from higher railroad profits, a land sale in Utah and a tax settlement, posted third-quarter net income of $437 million, or $1.63 a share, the Omaha World-Herald reported.
The Omaha-based transportation giant, whose largest subsidiary is the Union Pacific Railroad, said third-quarter income was up 60 percent from a year ago.
Not including one-time gains from the land sale and the tax settlement, which stemmed from its 1986 purchase of the trucking firm Overnite Corp., net income per share was $1.19, a 14 percent increase from last year.
U.P. reported revenues of $3.2 billion for the quarter ending Sept. 30, up 5.7 percent from $3 billion last year.
U.P.’s third-quarter net income, counting the one-time items, exceeded analysts’ expectations of $1.42 per share. The company’s stock sold at $61.46 by midmorning Thursday, up $1.83 from Wednesday’s closing price.
“Union Pacific combined record revenues with all-time productivity levels to produce great results,” said Dick Davidson, chairman and chief executive officer. “We achieved double-digit growth in earnings per share for the fourth-straight quarter. This trend is further proof that our business strategy is on target.”
During a conference call with analysts, Davidson said other trends are on target, including a 2 percent lower railroad employee head count over the past year. He said he expects from 1,200 to 1,500 employees to leave from normal attrition by the end of 2002, bringing the count to about 47,000 rail workers.
Davidson also said during the call that 62 Union Pacific executives purchased 1 million shares of company stock in late 1999 with loans from the company. The first payment of those loans is due January 2003.
“We anticipate some officers will need to sell shares,” he said. “It’s to repay the amount owed to the company.”
Bob Turner, senior vice president of corporate relations, said that one way to raise necessary funds borrowed from the company is to sell shares.
Davidson also said the recent 10-day West Coast port shutdown will cost the company 5 cents to 10 cents per share in profits. Most of that loss will be felt in intermodal shipping, which includes hauling consumer goods such as television sets and toys.
“We do believe the economy is off the bottom,” Davidson said. “It’s somewhat better. If anybody is looking for a V-shape upturn, they’re going to have to wait a while.”
Meanwhile, Davidson said the company will concentrate on better service, increasing market share and improving its pricing. He said he expects 1 percent to 3 percent revenue growth and overall productivity improvements.
Trucking operations, including Overnite of Richmond, Va., reported $25.6 million in operating income for the third quarter, compared with $21.5 million from one year ago. The figures include operating income from Motor Cargo Industries Inc. of Salt Lake City, which U.P. acquired last November.
In the past nine months, Union Pacific reported revenues of $9.3 billion and net income of $963 million.