Union Pacific Profits Surge. Profits rise 83%.
Union Pacific profit surges on tax gain, economy
Thu Oct 27, 2005
Reuters
Copyright 2005
BOSTON, Union Pacific Corp. (UNP.N: Quote, Profile, Research), the largest U.S. railroad, on Thursday said quarterly profit rose 83 percent, boosted by a one-time tax benefit and heavy traffic of consumer goods, while Hurricane Rita hampered the transport of chemical products.
The rail operator posted a third-quarter net profit of $369 million, or $1.38 cents per share, versus $202 million or 77 cents per share a year earlier. Operating revenue rose 13 percent to $3.5 billion.
Excluding a $118 million gain from a lower nontax cash expense, Union Pacific's earnings totaled 94 cents per share. That beat analysts' expectations of 91 cents a share and revenue also exceeded Wall Street estimates of $3.38 billion.
Union Pacific said last month that earnings would come in at the low-to-mid end of its previous earnings estimate range in the third quarter due to the impact of Hurricane Rita.
While a strong economy continues to drive the demand for the transport of goods, the effect of hurricanes Katrina and Rita hurt earnings from other rail operators Norfolk Southern Corp. (NSC.N: Quote, Profile, Research) and CSX Corp (CSX.N: Quote, Profile, Research).
Railroads continue to thrive in the face of high oil prices, because fuel accounts for a smaller portion of operating costs for rail as compared to truckers, making it a cost-effective alternative for hauling goods.
"We saw solid revenue growth in all six of our business segments in the quarter," Union Pacific Chief Executive Dick Davidson said in a statement. "With the exception of autos, demand across the board continues to be remarkably strong."
Union Pacific and Burlington Northern Santa Fe Corp. (BNI.N: Quote, Profile, Research) are both coping with two major derailments in the Powder River Basin, a region in Montana and Wyoming where most of the U.S. coal is mined.
Earlier this week, Burlington Northern said capacity out of the region should be greatly improved next year, but supply will still far outstrip demand from utility companies running low on coal inventory.
Year to date, shares of Union Pacific rose 3 percent, lagging behind an 11 percent rise on the S&P Railroads index.
© Reuters 2005. All Rights Reserved. today.reuters.com
Thu Oct 27, 2005
Reuters
Copyright 2005
BOSTON, Union Pacific Corp. (UNP.N: Quote, Profile, Research), the largest U.S. railroad, on Thursday said quarterly profit rose 83 percent, boosted by a one-time tax benefit and heavy traffic of consumer goods, while Hurricane Rita hampered the transport of chemical products.
The rail operator posted a third-quarter net profit of $369 million, or $1.38 cents per share, versus $202 million or 77 cents per share a year earlier. Operating revenue rose 13 percent to $3.5 billion.
Excluding a $118 million gain from a lower nontax cash expense, Union Pacific's earnings totaled 94 cents per share. That beat analysts' expectations of 91 cents a share and revenue also exceeded Wall Street estimates of $3.38 billion.
Union Pacific said last month that earnings would come in at the low-to-mid end of its previous earnings estimate range in the third quarter due to the impact of Hurricane Rita.
While a strong economy continues to drive the demand for the transport of goods, the effect of hurricanes Katrina and Rita hurt earnings from other rail operators Norfolk Southern Corp. (NSC.N: Quote, Profile, Research) and CSX Corp (CSX.N: Quote, Profile, Research).
Railroads continue to thrive in the face of high oil prices, because fuel accounts for a smaller portion of operating costs for rail as compared to truckers, making it a cost-effective alternative for hauling goods.
"We saw solid revenue growth in all six of our business segments in the quarter," Union Pacific Chief Executive Dick Davidson said in a statement. "With the exception of autos, demand across the board continues to be remarkably strong."
Union Pacific and Burlington Northern Santa Fe Corp. (BNI.N: Quote, Profile, Research) are both coping with two major derailments in the Powder River Basin, a region in Montana and Wyoming where most of the U.S. coal is mined.
Earlier this week, Burlington Northern said capacity out of the region should be greatly improved next year, but supply will still far outstrip demand from utility companies running low on coal inventory.
Year to date, shares of Union Pacific rose 3 percent, lagging behind an 11 percent rise on the S&P Railroads index.
© Reuters 2005. All Rights Reserved.
posted by Porkus Maximus Tex: at Thursday, October 27, 2005
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