Union Pacific profit up despite slump
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Union Pacific Corp posted a slightly better-than-expected 15 percent rise in profit, helped by higher prices and growing shipments of chemicals and autos.
But the largest publicly traded U.S. railroad, which like its peers is facing a slump in coal shipments, sounded a note of caution on the fourth quarter on Thursday, saying the uncertain economic environment could hit demand for its hauling services.
We had a relatively good fourth quarter last year and we do have some fundamental things in our business right now that represent some real challenges for us, said Chief Executive Jack Koraleski. His biggest concern was that the risk of sharp year-end federal spending cuts could dent consumer confidence and hurt sales of cars.
But the Omaha, Nebraska-based company, which does not provide specific earnings forecasts, stood by its plan for record results in 2012 and its shares rose 2.4 percent to $126.66.
Analysts expect roughly 12 percent growth in fourth-quarter earnings per share, according to Thomson Reuters I/B/E/S.
The cautious note was in line with other transport companies, ranging from CSX Corp to FedEx Corp.
It's a tone very consistent with what we've heard from transports generally, said Benjamin Hartford, an analyst at Robert W. Baird & Co. Freight trends are still soft.
The company said on Thursday third-quarter profit was $1.04 billion, or $2.19 per share, compared with $904 million, or $1.85 per share, a year earlier.
Earnings were a penny per share higher than analysts' average forecast of $2.18 a share.
Revenue rose 4.7 percent to $5.34 billion, from $5.1 billion a year earlier. Wall Street had anticipated $5.38 billion.
Union Pacific company reported a 12 percent drop in coal volumes, reflecting a long slump in shipments that has affected U.S. railroads since the mild winter of 2011-2012.
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