(The Associated Press distributed the following article on January 21.)
OMAHA, Neb. — Union Pacific Corp.’s profit jumped 46 percent in the fourth quarter, helped by the sale of its trucking business.
The parent company of the nation’s largest railroad reported Wednesday it earned $551 million, or $2.12 per share, for the quarter ended Dec. 31, up from $378 million, or $1.41 per share, in the same three-month period in 2002.
The October revenue and a gain on the subsequent sale of Union Pacific’s trucking unit, Overnite, added 84 cents per share to the company’s stock, outperforming the company’s earlier projections that the sale would add about 75 cents per share.
Union Pacific earned $1.28 from its other operations for the quarter, compared with $1.38 in the quarter a year ago.
Revenue rose to $2.97 billion versus $2.83 billion a year ago.
“The combination of the railroad’s strong cash generation and proceeds from the sale of Overnite has allowed us to further strengthen our balance sheet,” said Dick Davidson, chairman and chief executive of Union Pacific.
Revenue for the company’s railroad operation rose 6 percent with increaaes in all six of its business hauling groups — agriculture, automotive, chemical, energy, industrial and goods. It was the first time since 1999 that all six achieved quarterly growth.
Revenue from hauling goods like televisions and appliances was up 13 percent for the quarter, while industrial products was up 9 percent, energy products up 3 percent, and chemical products up 3 percent.
Revenue from hauling agriculture products was up 2 percent for the quarter, while automotive hauling revenue was up 1 percent.
“Looking ahead, I see a great deal of potential for Union Pacific in 2004, but some challenges as well,” Davidson said. “Last year’s earnings suffered due to increased fuel costs, which could be an issue again in 2004.”
Davidson predicted earnings to be up 30 or 40 percent in the company’s first quarter. A continued growth in earnings, he said, could lead to the company to hire more workers.
“We could well hire 2,000 to 3,000 people in 2004, in addition to the 2,500 or so we hired in 2003,” he said.
For the year, net income increased to $1.6 billion, or $6.04 per share, from $1.3 billion, or $5.05 per share, in 2002. Revenue rose to $11.6 billion from $11.2 billion in 2002.
In trading on the New York Stock Exchange, Union Pacific shares rose 58 cents to close at $67.01.