OMAHA, Neb. -- Union Pacific reported 13% more profit in the third quarter, but the railroad predicted Thursday that added shipments planned this year will drop slightly.
The Nebraska-based railroad with major Arkansas operations now expects its shipments to increase this year by about 3%, down from its previous forecast of a 4% to 5% increase.
Union Pacific reported $1.9 billion in third-quarter profit, or $3.05 per share, according to regulatory filings Thursday. That's up from $1.67 billion a year ago, or $2.57 per share, but this year's results were weighed down by new union contracts set to cost $114 million more than Union Pacific had planned, according to the company.
Without that one-time charge for new contracts, which only half of the unions have approved, Union Pacific would have reported earnings per share of $3.19, according to company. The average estimate of seven analysts surveyed by Zacks Investment Research was $3.06 per share.
The railroad reported that its revenue grew 18% to $6.57 billion because fuel surcharges and rate increases. Five analysts surveyed by Zacks expected $6.44 billion.
Union Pacific CEO Lance Fritz said the railroad continued to reduce shipping delays, but the company's performance still lagged behind last year. Two key performance measures, freight-car velocity and locomotive productivity, were down about 2% from last year, according to the company.
Despite the performance dips, the railroad has continued to hire more workers to help improve service, according to the company. Union Pacific reported that 890 new conductors have started working on the railroad so far this year, with 518 more in training now. Fritz predicted that rail service will return to normal levels in 2023.
Union Pacific is one of the nation's largest railroads with a network of 32,400 miles of track in 23 Western states. It operates the Jenks Locomotive Facility in North Little Rock. Often called the Jenks Shop, it is the largest of its kind in the Union Pacific network and among the largest in the world, according to the company.
The complex employs more than 1,100 people, who perform heavy maintenance on a fleet of 7,000 locomotives that pull more than 2,000 trains daily through the western two-thirds of the United States, according to the Union Pacific website.
The complex includes five other structures and several designated areas, each with a special purpose, including a material storage yard, storage tracks, a load test facility, a shutdown/start-up area, a prewash building, a tank farm and a pump-house, plus a locomotive paint shop, air brake shop, wheel shop, turbo repair shop and component remanufacturing center.
CSX ALSO BEATS EXPECTATIONS
Rail carrier CSX Corp. reported third-quarter profit Thursday of $1.11 billion, a nearly 14% percent gain compared with a year ago. The Jacksonville, Fla.-based company reported net income of 52 cents per share, according regulatory filings Thursday.
The average estimate of eight analysts surveyed by Zacks Investment Research was for earnings of 49 cents per share.
CSX posted revenue of $3.9 billion in the period, also surpassing Street forecasts. Six analysts surveyed by Zacks expected $3.76 billion.
Information for this article was contributed by staff of The Associated Press.