UP increases dividend, intermodal investment
Western freight railroad Union Pacific said it plans to increase dividends for shareholders, a sign of confidence by the company that profits are returning to a sustainable level as the economy improves.
UP, which two weeks ago reported a 43 percent increase in first quarter net income to $516 million, said its board voted to raise the quarterly dividend by 22 percent to 33 cents per share. The board also approved a $100 million increase in growth capital spending in 2010, bringing the full year investment to $2.6 billion. The additional money will primarily be used to purchase additional intermodal equipment.
This week the railroad announced several track improvement projects, including:
' $22 million to replace 48 miles of track and six switches, and resurface 89 road crossings on a stretch of line in Illinois.
' $20 million for replacing track, concrete ties and rock ballast for the roadbed on a 26-mile section in Wyoming.
' $8.5 million for track maintenance in Iowa.
' $3 million for work in Missouri.
In some locations UP is using a modern track renewal train that installs rail and concrete ties in a single pass. The TRT 909 can install up to 5,000 ties in a 12-hour day. The train consists of about 30 rail cars, each capable of carrying 210 concrete ties. Three sets of gantry cranes move the ties forward for the TRT to drop into place and the machine then threads the new rail onto the ties. The old wooden ties are picked up and discarded rail is threaded out as the machine works its way down the track. A conveyor positions the removed ties for the gantry cranes to load them onto railcars for movement to a facility for sorting.
