(Bloomberg News circulated the following story by Craig Trudell on January 22, 2010.)
NEW YORK — Union Pacific Corp. reclaimed the title of the biggest U.S. railroad by sales from Burlington Northern Santa Fe Corp., the carrier being acquired by Warren Buffett’s Berkshire Hathaway Inc.
Revenue for Union Pacific fell 21 percent to $14.1 billion in 2009, while Fort Worth, Texas-based Burlington Northern’s sales dropped 22 percent to $14 billion. Both railroads posted smaller fourth-quarter profits than a year earlier as the recession curbed shipping demand.
Rising volumes at Union Pacific for agricultural and automotive products and for so-called intermodal shipments that can move by rail, road or sea helped pare last quarter’s sales decline, and Chief Executive Officer James Young said the railroad may have seen the worst of an industry freight slump.
Union Pacific is “continuing to steal market share in the intermodal business from Burlington,” Donald Broughton, a St. Louis-based analyst for Avondale Partners LLC, said today. “As long as that trend continues, I’m going to continue to be bullish on the stock.”
Broughton recommends buying Omaha, Nebraska-based Union Pacific and selling Burlington Northern, whose shareholders will vote Feb. 11 on Buffett’s $100-a-share offer for the 77.4 percent of the railroad that Berkshire doesn’t already own.
Burlington Northern passed Union Pacific at the end of 2008 for the top spot by sales. The railroads compete against each other in the western U.S. Suann Lundsberg, a spokeswoman for Burlington Northern, declined to comment. Tom Lange, a spokesman for Union Pacific, didn’t immediately return a phone message.