Union Pacific Corp (NYSE:UNP) stock rose 0.34% (As on January 24, 11:22:25 AM UTC-4, Source: Google Finance) after the company reported a fourth-quarter profit that rose 7% on the back of higher grain and fertilizer shipments and core pricing gains. Union Pacific posted a net income of $1.76 billion in the fourth quarter, compared with $1.65 billion, a year earlier. The company’s fourth-quarter results included $40 million in labor expenses related to the ratification of a crew staffing agreement. Union Pacific’s revenue carloads increased by 5% YoY, while its operating ratio improved by 220 basis points to 58.7%. This improvement came despite the unfavorable 70 basis point impact from the crew staffing agreement ratification.

Meanwhile, the company, seen as a bellwether for the U.S. economy, has benefited from improving revenue in its grain, chemicals and intermodal segments following higher West Coast imports and a strong harvest season. In December, Union Pacific executives said they were starting to see improvements in domestic intermodal shipments, driven by volumes coming through West Coast ports. Disruptions in the Red Sea, coupled with threats of potential new tariffs and a labor dispute at seaports on the U.S. East and Gulf Coast saw import volumes rising particularly on the West Coast.

UNP in the fourth quarter of FY 24 has reported the adjusted earnings per share of $2.91, beating the analysts’ estimates for the adjusted earnings per share of $2.77. The company had reported the adjusted revenue decline of 1 percent to $6.12 billion in the fourth quarter of FY 24, missing the analysts’ estimates for revenue of $6.14 billion, according to data compiled by LSEG. This is driven by lower fuel surcharge revenue, unfavorable business mix, and lower other revenue, partially offset by increased volume and core pricing gains.

For the full year 2024, Union Pacific reported earnings per diluted share of $11.09, up 6% from the previous year. The company’s operating revenue for the year increased by 1% to $24.3 billion, driven by higher volume and core pricing gains. Looking ahead to 2025, Union Pacific expects volume to be impacted by a mixed economic backdrop, coal demand, and challenging YoY international intermodal comparisons. The company anticipates earnings per share growth consistent with its 3-year CAGR target of high-single to low-double digits. Union Pacific plans a capital expenditure of $3.4 billion for 2025 and aims to repurchase $4.0 to $4.5 billion in shares, maintaining its long-term capital allocation strategy.