(AP) Union Pacific says its third-quarter profit rose 10 percent as higher shipping rates helped the railroad offset flat volume overall and last month's flooding in Colorado that disrupted traffic.
The results released Thursday were roughly in line with the reduced forecast Union Pacific issued this month and Wall Street expectations.
The Omaha-based railroad reported net income of $1.15 billion, or $2.48 per share, in the quarter ended Sept. 30. That's up from $1.04 billion, or $2.19 per share, a year ago.
Union Pacific Corp. says its revenue grew 4 percent to $5.6 billion.
Analysts surveyed by FactSet expected earnings of $2.48 per share on revenue of $5.61 billion.
Its shares fell $2.11, or 1.3 percent, to $155.05 in morning trading.
Edward Jones analyst Logan Purk said he thinks Union Pacific's reduced earnings forecast earlier this month was a byproduct of overheated expectations, not problems at the railroad.
"I'm not worried about the operation of Union Pacific. It is the darling railroad, and expectations reflected that," Purk said.
Union Pacific said the number of carloads of coal, grain and intermodal shipping containers all declined in the quarter, but improvements in other sectors balanced out those declines for flat volume overall.
Shipments of industrial products grew 9 percent as construction activity picked up, and automotive shipments improved 8 percent on strong sales. Chemical shipments were also up 3 percent.
Price increases helped the railroad offset the volume declines in some areas. Agriculture was the only sector were Union Pacific's revenue declined and that only slipped 2 percent.
Purk said Union Pacific's pricing power was helped by being able to renegotiate old contracts that had outdated rates.
Union Pacific said the flooding in Colorado cost the railroad $10 million in the quarter for repairs and lost business.
The railroad repurchased nearly 3.7 million shares for $575 million reducing the number of shares outstanding by 2 percent.
Union Pacific operates 32,400 miles of track in 23 states from the Midwest to the West and Gulf coasts.
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Union Pacific Corp.: www.up.com