(Adds details on operating ratio, estimates)
Jan 24 (Reuters) – U.S. railroad operator Union Pacific Corp on Thursday reported a better-than-expected quarterly profit, as higher demand for industrial shipments and cost controls bolstered results.
Its operating ratio – a measure of operating expenses as a percentage of revenue and a key metric for Wall Street – improved 1.1 points to 61.6 percent for the fourth quarter compared with the same period last year, the company said.
A lower ratio means more efficiency and higher profitability.
Union Pacific, the No. 1 U.S. railroad, aims to reduce its operating ratio to at least 60 percent by the end of 2020.
Rival CSX Corp, the No. 3 U.S. railroad operator, earlier this month reported a fourth quarter operating ratio of 60.3 percent and said its 2019 operating ratio target would come in below 60 percent.
Omaha, Nebraska-based Union Pacific’s net income fell to $1.55 billion, or $2.12 per share in the fourth quarter ended Dec. 31, from $7.28 billion, or $9.25 per share, a year earlier when it got a boost from changes in U.S. tax laws.
Freight revenue in the quarter rose 6 percent, lifting total operating revenue to $5.76 billion from $5.45 billion.
Analysts, on average, expected a profit of $2.06 per share and revenue of $5.74 billion, according to IBES data from Refinitiv. (Reporting by Rama Venkat in Bengaluru; Editing by Shailesh Kuber)
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