OMAHA, Neb. (AP) — Union Pacific railroad delivered flat profit in the first quarter as weather slowed trains across the western United States and inflation drove costs up, but executives are optimistic about their ability to handle all the goods companies want to ship the rest of the year as more new employees are completing training.
The Omaha, Nebraska-based railroad said it earned $1.63 billion, or $2.67 per share, in the first quarter. That's in line with last year's $1.63 billion profit but higher per share than last year's $2.57 because the railroad has been steadily buying back its shares.
The results topped the average Wall Street forecast for earnings of $2.57 per share, according to the eight analysts surveyed by Zacks Investment Research.
CEO Lance Fritz said he’s confident the railroad can continue to get more efficient this year while handling the demand for shipments.
The railroad maintained its guidance for the number of carloads it carries to grow more than industrial production, but in a reflection of the concerns about the economy amid increasing interest rates, Union Pacific said the current forecast calls for industrial production to shrink 0.7% this year. Volume was down about 1% in the first quarter.
Revenue grew 3% to $6.056 billion as the railroad collected higher fuel surcharges and raised its core rates. Plus, there was a one-time $107 million gain on a real estate sale. Five analysts surveyed by Zacks expected $6.07 billion.
But expenses up 8% to $3.76 billion as inflation and the new contract railroads agreed to with their workers last year pushed up the cost of fuel, materials and wages.
Union Pacific said the number of workers it employed grew 4% to 31,471 in the quarter after it has been hiring aggressively over the past year to help it improve service. Shippers have been complaining about delayed deliveries and poor service that the railroad blamed mostly on a lack of train crews and other employees.
Union Pacific is one of the nation's largest railroads and its trains operate across more than 30,000 miles of track in 23 western states.