Union Pacific profit up 53pc, CEO blasts Democrat rail reforms

UNION PACIFIC, the largest US railway by revenue, has posted a 53 per cent year-on-year second quarter net profit increase to $711 million, reported Bloomberg.

Union Pacific CEO Jim Young said congressional legislation now in the works would increase government oversight of mergers and allow shippers to challenge rates. The measures are making it hard for rail companies to plan, he said.

"I'm having a hard time seeing how those policies encourage new investment," Mr Young told Bloomberg. In addition, he said the government's push for high-speed passenger rail service distracts from the more pressing concerns for freight.

Business volumes, as measured by total revenue carloads, reported Dow Jones, increased 18 per cent in the second quarter from a year ago, while diesel fuel prices rose 46 per cent. Freight revenue was up on all fronts with the energy segment - the company's biggest by revenue - up 17 per cent and its industrial-products segment enjoying a 30 per cent rise. Automotive revenue was more than doubled, while intermodal grew 35 per cent.

"The company's results further highlights the transport sector's rebound from last year's moribund levels, as executives and a number of companies have noted improved volume trends that suggest the US economic recovery is continuing," said Dow Jones.

The Omaha-based railway agreed to move forward on a high-speed rail line from Chicago to St Louis after settling with the government on minimum terms, including recovery of its initial investment, the railway still thinks the plan is no good.

"If I had a choice, I wouldn't be doing this. We need to focus on freight for our good and for the good of the country," said Mr Young.

The Chicago-St Louis route received $1.1 billion from last year's $787 billion economic-stimulus package. Passenger trains will travel 110 miles an hour on the new line. Work begins in September.
(Source:www.schednet.com)