By JOSH FUNK, AP Business Author
OMAHA, Neb. (AP) — Union Pacific delivered 13% more profit within the third quarter, however the railroad predicted Thursday that its customers will ship fewer items than it expected, suggesting that the economy could also be slowing down.
The Omaha, Nebraska-based railroad said it now expects the variety of shipments it handles to be up about 3% this yr and match the third-quarter number. Previously, Union Pacific had predicted that volume can be up 4% to five% this yr.
Shares of the corporate slipped about 3.2% in premarket trading.
Union Pacific reported $1.9 billion profit, or $3.05 per share, within the quarter. That is up from $1.67 billion, or $2.57 per share, a yr ago, but this yr’s results were weighed down since the recent contracts the railroads agreed to with their 12 unions cost $114 million greater than Union Pacific had been planning on. Without that one-time charge for the brand new contracts, which only half of the unions have approved, Union Pacific would have reported earnings per share of $3.19.
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The outcomes exceeded Wall Street expectations. The common estimate of seven analysts surveyed by Zacks Investment Research was for earnings of $3.06 per share.
The railroad said its revenue grew 18% to $6.57 billion because fuel surcharges and the rates it charges customers were up. That also topped the Street’s forecast. Five analysts surveyed by Zacks expected $6.44 billion.
CEO Lance Fritz said the railroad continued to cut back the delays that shippers have been complaining about this yr, but Union Pacific’s performance still lagged behind last yr. The railroad said two key performance measures, freight automobile velocity and locomotive productivity, were each down about 2% from last yr.
However the railroad has continued to rent more staff to assist improve service. Union Pacific said that thus far this yr 890 recent conductors have began working on the railroad, and one other 518 are in training now.
Union Pacific is considered one of the nation’s largest railroads with a network of 32,400 miles (52,000 kilometers) of track in 23 Western states.
Elements of this story were generated by Automated Insights (http://automatedinsights.com/ap) using data from Zacks Investment Research. Access a Zacks stock report on UNP at https://www.zacks.com/ap/UNP
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