Omaha’s Union Pacific Corp., the largest U.S. railroad, said Thursday that fourth-quarter profit rose 13 percent on higher corn shipments from last year’s robust harvest, some of which is now in storage awaiting additional hauling when called upon by food processors and others.
The employer of about 5,000 in the Omaha metro area said net income was $1.2 billion, or $2.55 a share, up from $1 billion, or $2.19 a share, a year earlier. Revenue rose 7 percent to $5.6 billion. For all of 2013, net income rose 11 percent to $4.4 billion, or $9.42 a share.
Freight revenue from shipping agricultural products rose 19 percent, as the company prospered from a 2013 U.S. corn crop of 13.9 billion bushels, up 30 percent from a 2012 harvest savaged by drought.
Bullish trends in the economy’s myriad corners such as farming add up big for Union Pacific, which makes its money hauling ag products, chemicals and more of life’s essentials in 23 states west of Chicago and New Orleans.
“Agriculture was a welcome relief after the previous year’s drought,” Chief Executive Jack Koraleski said in an interview. “After grain is stored, there is the possibility we might ship it again, either for export or domestic use.”
Union Pacific, with 50,000 employees companywide, said prices charged to shippers during the quarter rose about 3.25 percent. The volume of goods shipped climbed 2 percent.
Among the company’s main freight categories, shipments changed as follows:
>> Agricultural volume rose 13 percent.
>> Automotive rose 10 percent.
>> Chemicals fell 1 percent.
>> Coal, the largest category, fell 10 percent.
>> Industrial products rose 9 percent.
>> Intermodal, or the handling of containerized freight across multiple transport methods, rose 2 percent.
Within the ag segment, Koraleski said, shipments of grain such as corn and soybeans climbed 41 percent; he said a lot of the shipments were destined for export terminals and end-use in Asia, Africa and Mexico.
The quarter marked the first in six during which Union Pacific, which just edges out BNSF as the largest railroad by operating revenue, recorded growth in volumes shipped. Koraleski said the company plans to hire new workers to handle growth in 2014, as well as replace workers who retire or leave for other reasons.
U.P. shares rose 26 percent in the year ended Wednesday, compared with 24 percent for the Standard & Poor’s 500 Index.