Union Pacific Corp.'s (UNP) first-quarter earnings rose 35% as the railroad booked better-than-expected revenue with help from its growing industrial and chemical businesses.
The largest U.S. public railroad by market capitalization once more saw results benefit from booming demand for hauling materials to and from new shale-oil drilling sites.
Union Pacific transports steel, sand and pipe to drilling sites where oil and gas are extracted from shale rock, and then hauls out resulting crude oil.
The trend helped boost first-quarter volumes in Union Pacific's chemicals and industrial products businesses, which posted an 8% and 10% year-over-year jump in volume, respectively.
Overall volume was up 1%. Chief Executive Jack Koraleski noted Thursday that softer coal demand remains a challenge for the company.
Union Pacific reported a profit of $863 million, or $1.79 a share, compared with a year-earlier profit of $639 million, or $1.29 a share.
Revenue rose 14% to $5.11 billion. Analysts expected earnings of $1.63 a share on revenue of $4.98 billion, according to a poll conducted by Thomson Reuters.
The quarter's gains came despite continued high fuel costs faced by the railroad. Union Pacific said its average fuel costs jumped 12% from a year ago in the first quarter.
Shares were up 1.2% to $111 in premarket trade. The stock is up 3.5% since the start of the year.
-By Mia Lamar, Dow Jones Newswires; 212-416-3207; email@example.com