No. 1 U.S. railroad Union Pacific Corp reported a higher quarterly net profit as lower fuel costs and pricing gains offset falling freight volumes, but results fell short of market expectations. Union Pacific saw the volume of coal on its rails fall 5 percent during the quarter. U.S. utilities have taken advantage of lower natural gas prices, burning less coal in the process. The strong U.S. dollar has also led to lower coal exports. CSX Corp and Norfolk Southern Corp., the third and fourth largest railroads, respectively, have also reported first-quarter results impacted by declining coal usage, as did regional railroad Kansas City Southern. Overall, Union Pacific's freight volumes in the quarter fell 2 percent, with declines in all segments except agricultural products and automotive. "While we took actions during the quarter to adjust for the volume decline, we did not run an efficient operation," Chief Executive Lance Fritz said in a statement. "We are taking the steps to align our resources with current demand." Omaha-based Union Pacific posted first-quarter net income of $1.15 billion or $1.30 per share, up 5.5 percent from $1.09 billion or $1.19 per share a year earlier. Analysts had expected earnings per share of $1.37. The company said revenue in the quarter dipped slightly to $5.61 billion from $5.64 billion, which was below analyst expectations of $5.7 billion. Union Pacific's fuel bill in the first quarter fell nearly 39 percent to $564 million from $921 million. That decline was somewhat offset by a corresponding drop in fuel surcharges the railroad passes on to its customers. (Reuters)