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Union Pacific Q1 profit up 14.9pc to US$1.1 billion, revenues rise 7pc

UNION Pacific, America's largest railway, posted a 14.9 per cent year on year first quarter net profit increase, to US$1.1 billion, drawn on revenues of $5.6 billion, up seven per cent.

"Union Pacific achieved record first quarter financial results in the face of challenging weather conditions," said CEO Jack Koraleski. "As we look forward, we see signs of gradual economic improvement and we are encouraged."

First quarter business volume, as measured by total revenue carloads, increased five per cent year on year, said the company statement.

Volume increased in agricultural products, industrial products, coal, intermodal and automotive. Chemicals volumes were flat versus 2013 as growth in base chemicals was offset by a reduction in crude oil shipments.

Quarterly freight revenue increased six per cent, driven by volume growth and core pricing gains.

Diesel fuel prices at $3.12 per gallon in the first quarter were down three per cent year on year.

Quarterly train speed, as reported to the Association of American Railroads, was 24.5 mph, down seven per cent versus the first quarter 2013.

Its largest cargo, grains for export to Mexico and China, increased. Coal demand, after two years of decline, is also expected to increase because power producers are switching back to it as natural gas prices rise.