(Reuters) -U.S. railroad operator Union Pacific reported a 7% rise in second-quarter profit on Thursday, as strong pricing and increased volumes more than offset reduced fuel surcharge and business mix headwinds.
The company said it expects volumes in the second half of the year to remain uncertain based on macro indicators and coal demand, while adding it intends to carry out share repurchases worth about $1.5 billion in 2024.
Union Pacific’s CEO, Jim Vena, in May said that the company has to deal with a lot of inflationary pressure that was built into the railroads and has looked towards pricing gains and productivity improvements to mitigate the issue.
The company, seen as a bellwether for the U.S. economy, has continued to face headwinds from domestic coal demand as people turn to cheap stockpiles of natural gas for energy.
Union Pacific’s net income rose to $1.67 billion, or $2.74 per share, in the quarter ended June 30, from $1.57 billion, or $2.57 per share, a year earlier.
Despite few severe weather events, rail service at Union Pacific held up well during the quarter as railroads continue to improve train speed and dwell time, aiming to achieve over the road volume conversion.
(Reporting by Abhinav Parmar in Bengaluru; Editing by Shilpi Majumdar and Maju Samuel)
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