UP raises first quarter earnings expectations
Union Pacific Corp., owners of the largest North American railroad Union Pacific Railroad, Tuesday raised its expectations for first quarter earnings after better than expected commodity revenue growth and increased operating margin.
UP said its earning will be in the range of $1.00 to $1.10 per diluted share, compared to the previous expected range of 80 cents to 90 cents per diluted share.
First quarter carload volume is expected to increase 4 percent versus an original outlook of 3 percent growth. Total commodity revenue should grow approximately 17 percent versus original expectations for 15 percent quarterly growth.
“The revenue upside is driven by strong demand for intermodal, industrial products and agricultural products, somewhat offset by lower than anticipated coal volumes. Ongoing mine production issues, especially in Colorado, have been the primary factor in reduced first quarter coal loadings,” UP said in a statement.
“We are leveraging more of our strong revenue growth to the bottom line and our operations have benefited from a mild winter,” said Jim Young, UP’s president and chief executive officer.
“We could still face challenges before we close out March, but we have made operational gains in the quarter. Customers are also seeing greater consistency in our train operations and ongoing efforts to increase network capacity should facilitate service improvements throughout 2006,” said Young.
The company had originally expected to earn $4.60 to $4.80 per diluted share in 2006. UP’s revised full year expectations are now $4.80 to $5.00 per diluted share.
