Union Pacific Corp.'s first-quarter earnings chugged ahead 22 percent as the railroad hauled 2 percent more freight and increased its prices.
The Omaha, Nebraska-based railroad said Thursday it earned $1.31 billion, or $1.68 per share, in the first quarter. That's up from $1.07 billion, or $1.32 per share, a year ago.
That's better than the $1.65 per share that the analysts surveyed by Zacks Investment Research predicted.
Union Pacific CEO Lance Fritz said congestion had eased along the railroad in recent weeks, and he is optimistic about the year ahead.
"With the economy favoring a number of our market segments, we are well positioned to benefit from another year of positive volume growth and solid core pricing gains," Fritz said.
But UP officials did back off the railroad's long-term targets for cutting costs and improving efficiency because the congestion this quarter created roughly $40 million in additional expenses.
Fritz said the railroad remains committed to becoming more efficient but won't hit its 2019 target. A new goal will be announced at Union Pacific's investor conference at the end of May.
Union Pacific shares slipped more than 2.5 percent Thursday afternoon to $132.44 after the report.
Edward Jones analyst Dan Sherman said it will be hard for the railroad to focus on cutting expenses at the same time it is scaling up to handle higher volume.
The railroad said its quarterly revenue grew 7 percent to $5.48 billion. Wall Street expected $5.37 billion revenue.
Union Pacific shares have increased 1.5 percent since the beginning of the year, while the Standard & Poor's 500 index has declined slightly more than 1 percent. The stock has climbed 23 percent in the last 12 months.
The railroad operates 32,400 miles of track in 23 states.
Elements of this story were generated by Automated Insights (http://automatedinsights.com/ap) using data from Zacks Investment Research. Access a Zacks stock report on UNP at https://www.zacks.com/ap/UNP