"My expectations are it will be a positive trend in the economy," Union Pacific Chairman and CEO Jim Young said in an interview. "We're feeling very good."
The railroad, which transports a broad mix of consumer, industrial and agricultural products around the United States, is preparing for business growth even though it is "tough to see where the economy is going," he said. "But we've got to be agile."
Growing shipments of goods into the country shows "the consumer is back to some degree," Young added. "Everybody is cautious. But clearly they are back a little bit."
Union Pacific's intermodal freight revenue grew 34 percent in the third quarter, second only to revenue tied to automotive-related shipments, which rose 36 percent. Business volumes, as measured by total revenue carloads, grew 14 percent from the year-ago quarter.
Union Pacific is purchasing 100 locomotives and will expand a hiring program that has added about 1,700 employees so far this year, Young said.
The current staff of about 43,000 is still well off the railroad's pre-recession peak of 52,000 and new hires are needed to keep up with growing business volume, he said.
The company is also trying to take advantage of lower property values by acquiring land for future facilities and track within the 23 states in which it operates.
"We have accelerated some of property purchases," said Young. "There are some pretty good opportunities out there. It is a great time to buy."
Young said that after ending the third quarter with records in operating income, net income and earnings-per-share growth, the company sees 2010 coming in as its best year ever.
Union Pacific said on Thursday that third-quarter net income rose to $778 million, or $1.56 a share, from $514 million, or $1.01 a share, a year ago, boosted by increased volumes across all business lines, operational efficiencies and an average core price gain of 5.5 percent.
Union Pacific said quarterly operating revenue rose 20 percent to $4.4 billion from $3.7 billion a year earlier, and above analysts' expectations for $4.36 billion. (Reuters)
