OMAHA, Neb. — Business was up and productivity was strong, Union Pacific Corp. said Thursday as it reported a 14 percent earnings increase in its third quarter.
According to the Associated Press, the nation’s largest railroad had net income of $437 million, or $1.63 per share, in the quarter ended Sept. 30. A year ago, Union Pacific earned $267 million in the same period.
Excluding one-time gains from a transaction with the Utah Transit Authority and a tax settlement, Union Pacific had operating income of $316 million, or $1.19 a share, compared with $267 million, or $1.04 a share for the same period last year.
Revenue for the quarter was $3.2 billion, up from $3.0 billion a year earlier.
Revenue from hauling cars was up 13 percent from last year’s third quarter, up 9 percent for retail goods, 4 percent for farm commodities, 4 percent for industrial products and 2 percent for chemicals, the company said. The only commodity group that was down was energy, at 3 percent, Union Pacific said.
A West Coast port labor dispute that began Sept. 27 and ended 10 days later with a presidential order for a “cooling-off” period cost Union Pacific up to $5 million a day in deferred revenue, the company said.
“We have been facing some challenges in the wake of the port disruption,” Union Pacific chairman and chief executive Dick Davidson said. “Fortunately, our strong rail franchise gives us the revenue diversity and network flexibility to rebound rapidly.”
Union Pacific’s gains were impressive given the nation’s flat economy, said Rick Paterson, analyst with UBS Warburg in New York.
“They continue to grow revenue faster than costs in a difficult environment,” Paterson said.
In midday trading Thursday, Union Pacific stock climbed $1.36 to $61.28 a share.
The West Coast labor dispute affected three days of the railroad’s third quarter but may have more of an impact in the fourth quarter as the dock workers try to catch up with a backlog of work and Union Pacific seeks to ship it, Paterson said.
“Port productivity problems could be an inhibitor of intermodal revenue growth,” UBS’s Paterson said.
Excluding its trucking operation Overnite Corp., Union Pacific had operating income of $619 million, up from $556 million in the same period last year. Overnite had a 19 percent increase in operating income of $25.6 million, compared to $21.5 million in last year’s third quarter.
“Overnite made an impressive contribution to the quarter with its best overall quarterly performance since 1994,” Davidson said.