(This April 18 story corrects to show operating ratio declined, error also occurred in previous updates)
By Lisa Baertlein and Rachit Vats
(Reuters) - U.S. railroad operator Union Pacific Corp on Thursday reported a better-than-expected quarterly profit as price increases and cost controls offset the impact of severe winter weather and record flooding that damaged rails in the Midwest.
The quarter was a test for the second-largest U.S. railroad’s sweeping operational overhaul, and the results sent shares up 4.9 percent to $177.63.
Efforts to streamline operations and create surge capacity helped railway crews reroute the 50 to 60 daily trains that use the east-west main line that floodwaters severed for almost two weeks, Chief Executive Lance Fritz told Reuters.
“We’re gaining traction. ... I see us coming back quickly and strongly,” Fritz said.
Net income at Union Pacific, which serves the Western two-thirds of the country, rose 6.2 percent to $1.4 billion, or $1.93 per share, in the first quarter. That topped analysts’ average forecast of $1.89, according to IBES data from Refinitiv.
Total operating revenue fell 1.7 percent to $5.4 billion. Weather and the U.S. trade war with China reduced export grain carloads, but pricing rose nearly 2.8 percent.
Expenses dropped 3.2 percent, assisted by workforce reductions and a switch to longer trains, which reduces fuel, maintenance and labor costs.
The Omaha, Nebraska-based company early this year hired former Canadian National Railway Co executive and turnaround expert Jim Vena as its chief operating officer and tasked him with overseeing its plan to lower costs and improve service and reliability.
Union Pacific’s
