NEW YORK — Union Pacific Corp., the No. 1 railway operator in the United States, on Wednesday said it expects that its 2002 earnings per share will be higher than in 2001, and that its revenues next year will grow from 1 percent to 3 percent, depending on the economy, reports a wire service.
The company also expects that its 2002 operating ratio, free cash flow and return on capital will all show improvement over 2001, Chief Executive Dick Davidson said in opening remarks to a two-day meeting for financial analysts and investors held in Omaha, Nebraska.
For the 2003-2005 period, Union Pacific said it expects double-digit earnings-per-share growth and revenue growth of 3 percent to 5 percent. It also said its operating ratio — or the cost of earning $1 of revenue — would fall to the mid-70s. The company reported an operating ratio of 79.7 for the third quarter on Oct. 18. It also said its free cash flow would grow to $500 million to $700 million a year.
Analysts currently expect Union Pacific to earn an average of $3.66 per share in 2001 and $4.15 per share in 2002, according to eight brokers surveyed by research firm Thomson Financial/First Call.
Union Pacific based its projections on its “yield strategy,” which focuses on growing revenues through price improvements, better service, and higher productivity, Davidson said.
“Fundamentally, we expect to grow our business faster than the rate of economic expansion,” Davidson said. It now forecasts GDP growth in the low 2 percent range.
Union Pacific shares were down 33 cents to $54.82 on the New York Stock Exchange Wednesday afternoon, near the high end of a 52-week trading range of $43.75 to $60.70.