OMAHA, Neb. -- Union Pacific's first-quarter profit surged 11 percent as higher shipping rates offset the continued weak demand for coal. The railroad expects shipping volume to improve later this year.
The Omaha, Neb.,-based railroad said Thursday that it generated net income of $957 million, or $2.03 per share, in the quarter. That's up from $863 million, or $1.79 per share, a year earlier. Revenue rose to $5.29 billion revenue from $5.1 billion revenue.
The results beat Wall Street's expectations. Analysts surveyed by FactSet expected earnings per share of $1.96 on revenue of $5.22 billion.
Over the rest of the year Union Pacific officials say they're expecting a slight increase in shipping volume as long as the economy continues growing slowly and normal weather patterns return.
"We are well-positioned for upside but we are just as prepared if our environment takes a turn for the worse," Union Pacific CEO Jack Koraleski said.
Union Pacific shares gained $2.29, or nearly 2 percent, to $139.25 in premarket trading.
In the first quarter, the railroad's total shipping volume declined 2 percent because of a drop in coal and agricultural shipments.
Union Pacific hauled 19 percent fewer carloads of coal in the first quarter. Last year's drought caused a 9 percent decline in agricultural shipments. But strong growth in crude oil shipments and intermodal containers, and a core rate increase of 4 percent on most shipments made up for that.
Coal demand has suffered over the past couple of years as cheap natural gas and concerns about environmental regulations prompted many utilities to switch to using natural gas.
Union Pacific operates 32,400 miles of track in 23 states from the Midwest to the West and Gulf coasts.