(The following story by Ruthie Ackerman appeared at Forbes.com on January 22, 2009.)
NEW YORK — Falling fuel costs and some unexpected pricing power helped Union Pacific chug along despite the U.S. recession.
On Thursday Union Pacific announced it beat consensus earnings expectations by 8 cents as its fourth-quarter profit soared 35.0% over the prior year, while revenues were slightly above forecast.
The company’s stock shot up 5.6%, or $2.27, to $42.79, in afternoon trading. But the shares have tumbled 42.3% in the past six months as economic activity has waned.
Union Pacific said its fourth-quarter average fuel price declined 6.0%, to $2.46 a gallon, down from $2.62 in the prior year. Meanwhile, carloads were 12.0% lower in the fourth quarter of 2008 than in the fourth quarter 2007. Yet revenue per carload rose almost 16.0%, to $3,472 from $3,006.
The company did not provide an earnings forecast, but said it expected to raise its freight prices 5.0% to 6.0% for 2009.
For the full year 2008, Union Pacific reported net income of $2.3 billion, or $4.54 per diluted share, up from $1.9 billion, or $3.46 per share, in 2007.
Union Pacific reported fourth-quarter net income of $661.0 million, or $1.31 a share, up from $491.0 million or 93 cents, in the prior year, well above analysts’ expectations of $1.23.
Revenue in the quarter rose to $4.29 billion, up from $4.20 billion in the fourth quarter of 2007. Analysts had expected revenue of $4.28 billion.