Union Pacific beats quarterly profit estimates on higher volumes, pricing

Recasts first paragraph, updates shares in paragraph 3, details from conference call in paragraphs 5 to 7; analyst comment in paragraph 8

By Anshuman Tripathy and Abhinav Parmar

Jan 23 (Reuters) - Union Pacific UNP.N on Thursday posted a better-than-expected profit for the fourth quarter helped by improving volumes and robust pricing, which was partially offset by lower fuel surcharge and less profitable cargo mix.

The railroad, seen as a bellwether for the U.S. economy, has benefited from improving volumes in its grain and intermodal segments following higher West Coast imports and a strong harvest season.

Shares of the company were up more than 4% in afternoon trade.

Disruptions in the Red Sea, coupled with threats of potential new tariffs and a labor dispute at seaports on the U.S. East and Gulf Coast saw import volumes rising particularly on the West Coast.

The company, on a conference call with analysts, said it anticipates volumes in coal to continue declining in 2025, while the industrial chemicals and plastics markets are expected to remain favorable.

It also expects domestic grain demand to remain steady through the first half of 2025, driven by strong grain yields from a good harvest last year.

When asked about the impact of potential new tariffs on the company's business, CEO Jim Vena said, "we plan for the worst. If something really bad happens, (we will) make sure that we are in a good position to handle that chiller."

Stephens analyst Daniel Imbro said "if there are tariffs on China, that could impact import volumes and would be probably negative for intermodal volume for Union Pacific given their presence in the West."

The Omaha, Nebraska-based company reported an operating ratio of 58.7% for the quarter ended Dec. 31, an improvement from 60.9% a year earlier.

Its operating revenue of $6.12 billion missed analysts' estimates of $6.14 billion. Quarterly profit came in at $2.96 per share, beating estimates of $2.78 per share, according to data compiled by LSEG.