Railroaders place to shoot the shit.

Members Login
Username 
 
Password 
    Remember Me  
Post Info TOPIC: Union Pacific Chief Young Sees ‘Elongated’ Economic Rebound


500 - Internal Server Error

Status: Offline
Posts: 36507
Date:
Union Pacific Chief Young Sees ‘Elongated’ Economic Rebound
Permalink  
 


Union Pacific Chief Young Sees Elongated Economic Rebound

(The following story by Angela Greiling appeared on the Bloomberg Businessweek website on June 16, 2010.)

Union Pacific Corp., which transports Asian auto imports, expects an elongated economic recovery, Chief Executive Officer Jim Young said.

Weve still got a ways to go, he said yesterday in an interview at Bloombergs New York office. Itll be a positive slope in terms of recovery, but I think its going to be very much elongated compared with anything weve seen before.

U.S. railroads cargo volume has increased during the past year, after plummeting beginning in 2008s fourth quarter. The rebound is an indicator of the wider rebound, Young said.

Were a darn good barometer of the economy, said Young, whose Omaha, Nebraska-based company has the largest locomotive fleet among U.S. railroads.

Union Pacifics shipments that move by a combination of rail, truck and ship, which include consumer goods such as furniture, have risen 24 percent this year, according to the Association of American Railroads. Thats the most among the four largest U.S. railroads.

The companys volume of other goods has climbed 9.3 percent, including a 67 percent increase in automotive shipments, which account for 6 percent of sales.

Burlington Northern Santa Fe Corp., which competes with Union Pacific in the western half of the U.S., had increases of 0.6 percent for rail-truck-ship cargo and 5.3 percent for other shipments. Burlington Northern is owned by Warren Buffetts Berkshire Hathaway Inc.

Young, 57, credited his companys efforts to improve service for outpacing Burlington Northern in shipment gains. He has been chief executive since January 2006.

Share Performance
Union Pacific gained $2.41 or 3.3 percent, to $75.15 at 4:15 p.m. yesterday in New York Stock Exchange composite trading. The shares have risen 18 percent this year, the most among the three companies in the Standard & Poors rail index.

The rail index has advanced 16 percent, while the S&P 500 has increased less than 1 percent.

Young said that his company will use its cash for capital spending and that hes not considering any acquisitions. Union Pacific raised its quarterly dividend 22 percent in May.

When I think about investment, what you want to do with cash, for us its putting a lot of the dollars back into the business, he said.

The company remains cautious about spending, Young said. Union Pacific still has about 3,300 laid-off employees, down from a peak of about 5,300, he said.

Credit Concern
Young said he doesnt expect Union Pacific to be directly affected by the European economic crisis. He said his biggest concern is that it may tighten credit access for the railroads smaller customers.

The credit availability to that mid-to-small customer has been a challenge for a long time, Young said.

UBS Securities analyst Rick Paterson estimated in a June 10 report that about 10 percent to 15 percent of Union Pacifics business is affected by overseas markets, primarily because of agriculture shipments. Paterson, who is based in New York, rates the companys shares neutral.

Wednesday, June 16, 2010



__________________

© Equal Opportunity Annoyer

Troll The Anti-Fast Freight Freddie

 

 

 

 

Page 1 of 1  sorted by
 
Quick Reply

Please log in to post quick replies.

Chatbox
Please log in to join the chat!