(In Oct 17 item, corrects paragraph four to attribute quote toCFO Rob Knight instead of executive vice president of operationsLance Fritz)
Oct 17 (Reuters) - Union Pacific Corp said onThursday that it expected its freight rates to rise more slowlyin 2014 than this year, sending its shares down more than 3percent.
The U.S. railroad posted higher third-quarter revenue as itraised rates by an average of 3.5 percent, but overall volumewas flat.
"The outlook for the fourth quarter and 2014 is muted, andthe rate of core pricing growth is decelerating," said R.W Bairdanalyst Benjamin Hartford. The company did not give an earningsforecast for the year.
On a conference call with analysts, chief financial officerRob Knight said Union Pacific did not expect pricing gains nextyear to match those of 2013.
Railroads are seen as key indicators of how an economy isdoing because of the variety of goods they transport.
The companies have suffered from a slump in coal shipmentvolumes as demand for natural gas has increased. For UnionPacific, a mild summer and flooding in Colorado hurt its coalvolumes.
Shipments rose 8 percent for automotive products and 9percent for industrial products.
Retailers proceeded cautiously with order volumes in thequarter, Eric Butler, executive vice president of marketing andsales, said on the call.
"Our current outlook is for the economy to continue its slowimprovement, although there is uncertainty in the marketplace,"Butler said.
Union Pacific, the largest publicly traded U.S. railroad,said coal volumes fell 7 percent, matching the decline atsmaller rival CSX Corp.
Butler said the company expected full-year coal volumes tobe down in the high single-digit percentage range, in partbecause of a lost contract.
Union Pacific, which links 23 states in the West andMidwest, said it had earned $1.15 billion, or $2.48 a share, upfrom $1 billion, or $2.19 a share, a year earlier.
Analysts on average were expecting a profit of $2.47 ashare, according to Thomson Reuters I/B/E/S.
Revenue for the Omaha, Nebraska-based company rose 4 percentto $5.6 billion, compared with analysts' estimates of $5.58billion.
The company's shares were down 3.3 percent at $152.01 on theNew York Stock Exchange. (Reporting by Nivedita Bhattacharjee in Chicago; Editing byJohn Wallace and Lisa Von Ahn)
- Company Earnings
- Union Pacific Corp
- Eric Butler