Union Pacific beats quarterly estimates on strong industrial demand

A Union Pacific rail car is parked at a Burlington Northern Santa Fe (BNSF) train yard in Seattle, Washington, U.S., February 10, 2017. REUTERS/Chris Helgren/File Photo

Jan 20 (Reuters) – Union Pacific Corp (UNP.N) on Thursday reported better-than-expected revenue and profit, as the railroad operator benefited from higher shipment prices even as overall volume fell due to supply chain snarls and a global semiconductor shortage.

The Omaha, Nebraska-based rail operator benefited from a surge in production in U.S. factories, which reached pre-pandemic highs in October and November.

However, overall volume shipped during the quarter fell 4% as supply chain disruptions hit automotive and intermodal freight.

“Although uncertainty remains around COVID-19 variants and supply chain disruptions, we see a positive demand environment in 2022,” Chief Executive Officer Lance Fritz said.

Operating ratio, a key profitability metric, at the largest U.S. railroad operator by market value improved to 57.4% from 61%, a year ago.

Union Pacific’s fourth-quarter total operating revenue rose 12% to $5.73 billion, beating average analyst estimates of $5.58 billion, according to Refinitiv data.

Shares of the company were up about 1% before the bell.

Net income for the U.S. railroad operator in the fourth quarter ended Dec. 31 rose to $1.71 billion, or $2.66 per share, from $1.38 billion, or $2.05 per share, a year ago.

Analysts, on average, were expecting a profit of $2.60 per share.

Reporting by Nathan Gomes in Bengaluru; Editing by Krishna Chandra Eluri

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