NEW YORK (AP) ¿ Shares of Pacer International Inc. soared Wednesday after the logistics service provider announced a surprise profit in the third quarter and a new contract with railroad Union Pacific.

Pacer stock climbed 89 cents, or 32.8 percent, to $3.60 in morning trading. The stock is still down 77 percent in the year to date.

Some analysts remained cautious on the logistics service provider, saying future earnings prospects looked unclear.

Late Tuesday, Pacer posted a quarterly profit of $600,000, or 2 cents per share. Analysts polled by Thomson Reuters had expected a loss of a penny per share.

The company also said it extended and expanded its contract with Union Pacific, giving it continued access to the entire rail network and equipment sharing arrangements. Pacer received a payment of $30 million under the deal.

Stifel Nicolaus analyst John Larkin commended the company's transition to a more "sustainable" retail intermodal supplier from wholesale, and said if it cuts costs, the stock could jump as operations improve.

Intermodal business involves switching freight from one type of transportation to another.

However, the new contract with Union Pacific could force Pacer to raise rates soon, meaning it may lose market share to competitors, said R.W. Baird analyst Jon Langenfeld in a client note Wednesday.

Meanwhile, the company will "struggle to be profitable," amid continuing declines in overall revenue and volumes, Langenfeld said. He maintained a "Neutral" rating.
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