Union Pacific profit down 9% but economy will grow in 2021

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OMAHA, Neb. (AP) – Union Pacific‘s first-quarter profit declined 9% as the railroad delivered less freight and its revenue fell, but it said the economy is steadily improving.

The Omaha, Nebraska-based company said Thursday that it earned $1.34 billion, or $2 per share, in the quarter. That’s down from $1.47 billion, or $2.15 per share, a year earlier.

The results did not meet Wall Street expectations as it delivered 1% less freight and had to deal with the severe cold in February. The average estimate of six analysts surveyed by Zacks Investment Research was for earnings of $2.06 per share. The railroad estimated that costs related to the weather weighed down its results by 16 cents per share.

Union Pacific‘s revenue fell 4% to $5 billion in the period, which fell short of the $5.04 billion that analysts expected as coal and industrial revenue were weak.

The railroad said it expects shipping volume to grow roughly 6% overall in 2021 as the economy continues to recover from the coronavirus pandemic and industrial production increases.

Union Pacific Corp. said it cut its expenses 3% in the quarter to $3 billion as it worked to improve productivity along the railroad.

Union Pacific shares have climbed slightly more than 7% since the beginning of the year, while the S&P;’s 500 index has risen 11%. The stock has risen 55% in the last 12 months.

Union Pacific is one of the nation’s largest railroads, and it operates 32,400 miles (52,000 kilometers) of track in 23 Western states.

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Elements of this story were generated by Automated Insights (http://automatedinsights.com/ap) using data from Zacks Investment Research. Access a Zacks stock report on UNP at https://www.zacks.com/ap/UNP

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