Union Pacific delivered a 33 percent improvement in its third-quarter profit, but officials say the railroad needs to become more efficient.
The Omaha, Nebraska-based railroad said Thursday it earned $1.59 billion, or $2.15 per share, in the quarter. That’s up from $1.19 billion, or $1.50 per share, a year ago.
The results exceeded the average Wall Street forecast of $2.09 per share, according to a survey by Zacks Investment Research. But UP CEO Lance Fritz said the railroad could have done more.
“While we reported solid financial results, we did not make the service and productivity gains that we expected during the quarter,” Fritz said. “However, we are making progress implementing our new Unified Plan 2020 and we are well positioned to drive improvement going forward.”
Earlier this week, Union Pacific announced plans to lay off 475 workers and eliminate 200 contract jobs as part of its overall effort to reduce its expenses and improve profits. The railroad said more job cuts are possible next year.
In addition to layoffs, Union Pacific has parked 625 locomotives since August as it works to streamline operations. The railroad also announced plans to consolidate its operating and engineering units.
Union Pacific’s revenue grew 10 percent to $5.93 billion during the quarter as the railroad hauled 6 percent more freight. The revenue beat analysts’ forecast of $5.88 billion.
Union Pacific Corp. shares have risen almost 5 percent since the beginning of the year, while the Standard & Poor’s 500 index has declined nearly 1 percent. The stock has climbed 24 percent in the last 12 months.
Union Pacific operates 32,400 miles of track in 23 western states.
A portion of this story was generated by Automated Insights (http://automatedinsights.com/ap) using data from Zacks Investment Research. Access a Zacks stock report on UNP at https://www.zacks.com/ap/UNP