(Adds third-quarter details, compares with estimates)
Oct 25 (Reuters) – Union Pacific Corp, the No. 1 U.S. railroad, topped quarterly Wall Street estimates for profit on Thursday, as it transported more industrial and agricultural products.
A strong economy, robust freight demand and a tight trucking market in the United States have buoyed the sector, with railroads also benefiting from President Donald Trump’s 2017 tax cuts.
The company’s freight revenue rose 10.1 percent in the third quarter. Freight revenue from industrial products, which include construction products and lumber, rose 13.1 percent, while revenue from agricultural products increased 6 percent.
Union Pacific said its operating ratio, a closely watched measure of operating expenses as a percentage of revenue and a key metric for Wall Street, was flat at 61.7 percent.
The company aims to reduce its operating ratio to at least 60 percent by the end of 2020. A lower operating ratio means more efficiency and higher profitability.
The company’s net income jumped 33 percent to $1.59 billion, or $2.15 per share, in the quarter ended Sept. 30.
Analysts on average had expected a profit of $2.10 per share, according to Refinitiv data.
Revenue rose 9.6 percent to $5.93 billion. (Reporting by Sanjana Shivdas in Bengaluru and Lisa Baertlein in Los Angeles; Editing by Maju Samuel)