Union Pacific and Norfolk Southern railroads reported strong results for the fourth quarter, while Southwest Airlines and American Airlines reported mixed results.
Omaha-Neb.-based Union Pacific reported Thursday that it had net income of $1.55 billion, or $2.12 per share, because the railroad delivered 3 percent more freight and increased prices. That's 6 cents better than expected, according to a survey by Zacks Investment Research. It's also 29 percent better than last year's adjusted income of $1.2 billion, or $1.53 per share.
Revenue was $5.76 billion, also edging out expectations and 6 percent higher than the previous year.
Union Pacific chief executive Lance Fritz said the railroad is also starting to see results from its effort to streamline its operations that began in October. The railroad has already stored 1,200 locomotives as it works to haul freight more efficiently.
Union Pacific expects to record at least $500 million in productivity improvements in 2019 as it implements some of the operating principles that have led to dramatic improvements in the profitability of rival CSX over the last two years.
"We have improved on-time service for our customers while at the same time eliminating excess costs and improving the utilization of network resources," Fritz said.
Union Pacific shares have increased 12 percent since the beginning of the year, while the Standard & Poor's 500 index has risen slightly more than 5 percent. The stock has risen 9 percent in the past 12 months.
Union Pacific operates 32,400 miles of track in 23 Western states.
The company had about 42,000 employees in the third quarter, about 2,500 of them in Arkansas. The North Little Rock Jenks Shop locomotive overhaul and maintenance facility employs more than 1,100 workers.
NORFOLK SOUTHERN
Norfolk Southern Corp. reported better-than-expected results in its fiscal fourth quarter.
The Norfolk, Va.-based railroad said Thursday that it earned $702 million, or $2.57 per share.
The results surpassed Wall Street expectations. The average estimate of nine analysts surveyed by Zacks Investment Research was for earnings of $2.30 per share.
The railroad posted revenue of $2.9 billion in the period, which also topped Wall Street forecasts. Six analysts surveyed by Zacks expected $2.85 billion.
Norfolk Southern shares have risen 11 percent since the beginning of the year.
SOUTHWEST AIRLINES
Southwest Airlines says it has lost $10 million to $15 million so far from the partial government shutdown but overall travel demand remains strong, boosting the carrier's outlook for first-quarter revenue.
The Dallas-based airline disclosed the shutdown impact Thursday as it reported a smaller fourth-quarter profit than a year earlier, but still better than analysts had expected.
The government shutdown is grounding some government and contractor travelers. It is also delaying approval of Southwest's plan to begin flying from California to Hawaii, because Federal Aviation Administration regulators who must approve the service remain off the job.
"We are anxious for the government to resolve this shutdown," Chairman and CEO Gary Kelly said in a statement.
Delta Air Lines said last week that the government shutdown that started Dec. 22 will cost it $25 million this month.
At Southwest, Kelly said, demand for tickets remains strong, including among corporate travelers.
Southwest said it earned $654 million in the fourth quarter, down 63 percent from $1.75 billion a year earlier.
The profit of $1.17 per share beat the average forecast of $1.06 from 12 analysts surveyed by Zacks Investment Research.
Revenue rose 8.5 percent to $5.7 billion, narrowly beating the analysts' forecasts. Spending on jet fuel and labor costs both rose.
The shares have climbed almost 10 percent since the beginning of the year. The stock has decreased 22 percent in the past 12 months.
AMERICAN AIRLINES
American Airlines said Thursday that it earned a fourth-quarter profit of $319 million, slightly higher than analysts expected, as strong travel demand helped the carrier overcome higher fuel prices.
Airline executives said the partial government shutdown has hurt bookings, but that sales to other customers, including key corporate travelers, has remained strong.
Unlike Delta Air Lines and Southwest Airlines, American did not put a dollar figure on the shutdown's effect.
More Transportation Security Administration airport screeners have been calling in sick, but Chairman and CEO Doug Parker rejected any notion that safety is being compromised.
American Airlines Group Inc. showed a profit in the fourth quarter after losing $583 million a year earlier. Profit excluding special items worked out to $1.04 per share, 2 cents better than the average analyst estimate compiled by Zacks Investment Research.
Revenue rose 3 percent to $10.94 billion, below analysts' forecast of $11.01 billion, however. Expenses rose 4 percent, driven largely by fuel prices.
The airline predicted that a key measure of revenue per mile would be flat to up 2 percent in the first quarter, and that it will earn between $5.50 and $7.50 per share for all of 2019.
Through Wednesday, shares of the Fort Worth-based airline were down slightly more than 1 percent in 2019 and 46 percent in the past 12 months.
Information for this article was contributed by Josh Funk and David Koenig of The Associated Press.
Business on 01/25/2019