June 28, 2005 9:00 AM, EDT

Union Pacific's Revenue Gains As It Raises Prices

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nion Pacific Corp. has seen its revenue grow of 10% in the second quarter, in part due to price hikes, Bloomberg reported Tuesday.

The revenue rise for the largest U.S. railroad by volume would be the biggest increase since the fourth quarter of 2003, Bloomberg said.

The railroad’s volume is growing between 1% and 2% so far this year and price increases are pushing revenue growth to about 10% for the quarter, Chief Executive Officer Richard Davidson told Bloomberg.

The increase is being driven by coal, construction materials and import and export shipments, he said.

UP, which was the least profitable U.S. railroad in the first quarter, is using price increases to boost its earnings, Bloomberg said. Its first-quarter margin was 9.9 cents per dollar of sales, less than half of rival Burlington Northern Santa Fe Corp.’s 22 cents.

UP Executive Vice President Jack Koraleski said May 24 that 2005 sales will rise as much as 9%, including 7% from higher prices and fuel fees.

Chief Financial Officer Robert Knight said in a May 24 conference call that second-quarter earnings will be 75 to 85 cents a share, reiterating an April forecast, Bloomberg reported.

Such a rise would be the first in six quarters, exceeding the $158 million, or 60 cents a share, posted in last year's second quarter, Bloomberg said.