Union Pacific beats profit estimates on strong freight demand, higher rates

July 23 (Reuters) - Union Pacific posted second-quarter profit above Wall Street estimates on Thursday, as higher freight rates and strong demand overshadowed an increase in operating costs. The West Coast railroad operator reported adjusted earnings of **$3.41 per share** for the second quarter, topping analysts' average estimate of **$3.24 per share**, according to LSEG data. Union Pacific's revenue jumped **12%** to **$6.86 billion** from a year earlier. Analysts' expectation came in at **$6.71 billion**. Its freight revenue also rose **12%** to **$6.52 billion** in the quarter. Shares of the company were up **2%** in premarket trading. U.S. railroads have capitalized on pricing strength and operational discipline, while efforts to improve network reliability and on-time performance have helped support freight volumes and attract new business. However, elevated fuel costs remain a key challenge for transportation companies after U.S.-Israeli strikes on Iran sent energy prices sharply higher, squeezing margins across sectors from trucking and logistics to airlines in one of the biggest disruptions since the COVID-19 pandemic. U.S. average gasoline prices rose above **$4 a gallon** in March for the first time in more than three years, capping the sharpest monthly increase in decades, and currently remain around the **$4-per-gallon** mark. Union Pacific's total operating expenses rose **13%** to **$4.1 billion** in the second quarter ended June 30, driven by a **63%** surge in fuel expenses to **$938 million**. The earnings report comes a day after the U.S. Surface Transportation Board ordered Union Pacific and Norfolk Southern to make public employee-impact data in their proposed merger application, siding with labor unions that had sought disclosure of the information. Union Pacific is pursuing an **$85 billion** acquisition of Norfolk Southern, a transaction that would create the first coast-to-coast U.S. freight railroad operator. The U.S. Surface Transportation Board in May paused its review of the companies' revised merger application and requested additional information related to competition and the transaction's impact on customers and rival railroads. The companies' merger application has been accepted by the Surface Transportation Board, although the agency has put subsequent proceedings, including an environmental review, on hold. The STB has exclusive jurisdiction over reviewing and approving railroad merger transactions.

Union Pacific beats profit estimates on strong freight demand, higher rates

Quarterly profit tops estimates

Higher fuel costs lifted expenses

Norfolk Southern merger review remains under scrutiny

Related News

Wall St opens lower as Big Tech earnings rekindle AI spending worries; oil jumps

Greenland Mines issues shareholder rights dividend under 1-year rights plan

Live Markets-Volatility compression gives way as U.S. 10-year yield breaks higher

Nasdaq Trade Halt <ZCMD.O> Volatility Trading Pause at 09:30 AM

Terreno Realty signs 244,000-sq-ft renewal, expansion leases in Carson, California