Union Pacific Reports Income Boost
OMAHA, Neb. (AP) _ Citing service improvements after its merger with Southern Pacific, leading railroad operator Union Pacific Corp. reported net income of $185 million for its first quarter of the year, a 43 percent increase over the same period a year ago.
Earnings per share increased to 74 cents from 52 cents per share in the first quarter of 1999. Net income in last year’s first quarter was $129 million.
Revenues rose 6 percent to $2.91 billion from $2.74 billion.
Union Pacific poured millions of dollars into implementing its 1996 merger with Southern Pacific as service problems crippled the railroad in 1997 and 1998. Now, Union Pacific appears to be finding its feet, earning $810 million last year compared to a net loss of $633 million the year before.
Because of higher oil prices, Union Pacific spent $100 million more on fuel in the quarter ended March 31 than in the same period the year before. At the same time, Union Pacific reported a 28 percent increase in operating income to $451 million. That figure excludes UP’s Overnite Transportation business, which has been hit by a Teamsters strike.
Union Pacific’s difficulty in implementing its merger was a key factor in the Surface Transportation Board’s decision in March to impose a 15-month moratorium on railroad mergers. The board, which regulates railroads, wants to study the problems from combinations in the 1990s and rewrite its merger rules.
The board’s decision has put a halt to Burlington Northern Santa Fe’s planned merger with Canadian National Railway.
Its shares were priced at $41.31 1/4 at 5:15 p.m. EST on the New York Stock Exchange, up $1 or about 2.5 percent.