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OMAHA, Neb. (AP) â¿¿ Union Pacific said Thursday that its third-quarter profit climbed 15 percent because price increases and more automotive and chemical shipments helped the railroad offset a 12 percent drop in coal shipments.
The railroad reported $1 billion in net income, or $2.19 per share. That's up from $904 million, or $1.85 per share, a year ago.
Union Pacific, based in Omaha, Neb., said Thursday that revenue grew 5 percent to $5.34 billion from last year's $5.1 billion.
Analysts surveyed by FactSet expected Union Pacific to report earnings per share of $2.18 on sales of $5.38 billion.
Union Pacific shares rose 1.3 percent, or $1.61, to close at $125.34 Thursday.
Declining coal volumes have been a challenge for the major freight railroads all year because of last year's mild winter and relatively low natural gas prices. Union Pacific says its total shipment volume declined only slightly because of increases in automotive, chemical and intermodal shipments.
Chemical shipments grew 18 percent to lead all sectors of Union Pacific's business. That sector includes the crude oil shipments that have been an important growth area for the railroad as more oil is mined from shale deposits such as the Bakken oil field in North Dakota and Montana.
Automotive shipments grew 13 percent as more Americans replaced aging vehicles with new ones.
Union Pacific CEO Jack Koraleski said the utilities that his railroad serves have coal stockpiles that remain about five to 10 days above normal, compared with the industry average of 20 days above normal. Fewer of the western utilities that Union Pacific serves have the ability to easily switch from burning coal to natural gas.
Koraleski said the railroad is working to respond to market conditions, but it's difficult to predict exactly what the next quarter will bring because of the elections and concerns about U.S. fiscal policy.