Breaking News

Tweet TWEET

Union Pacific Gains Most in Month on $9.5 Billion Buyback

Union Pacific Corp. (UNP) rose the most in more than a month after the largest U.S. railroad authorized a buyback plan of as much as $9.5 billion in stock.

The four-year program, which will repurchase as many as 60 million shares, is effective Jan. 1 and replaces the current authorization, Omaha, Nebraska-based Union Pacific said today in a statement. The buyback is equivalent to 13 percent of the current outstanding stock.

While profit has advanced at Union Pacific in every quarter since 2010, a 28 percent gain in the shares this year trails rivals CSX Corp. (CSX), Norfolk Southern Corp. and Kansas City Southern. Last month, Union Pacific reported third-quarter revenue that trailed analysts’ estimates.

The shares increased 1.4 percent to $160.78 at the close in New York. Union Pacific’s increase for the year is less than the 33 percent advance for the Standard & Poor’s 500 Railroads Index.

Since 2007, Union Pacific has repurchased about 19 percent of its outstanding shares at a total cost of almost $8.6 billion, according to the statement. The company also reported a quarterly dividend of 79 cents a share, payable on Jan. 2, to shareholders of record as of Dec. 3.

U.S. railroads are currently challenged with slumping volumes of fossil fuel as utilities switch to cheaper natural gas. Last quarter, Union Pacific said volume growth from industrial products, automotive, and chemicals was offset by declines in coal, agricultural products and intermodal shipments.  

Photographer: Ken James/Bloomberg

A Union Pacific Corp. employee closes the entry door on a rail car at the company's facility at the Port of Oakland in California. Close

A Union Pacific Corp. employee closes the entry door on a rail car at the company's... Read More

Close
Open
Photographer: Ken James/Bloomberg

A Union Pacific Corp. employee closes the entry door on a rail car at the company's facility at the Port of Oakland in California.

To contact the reporter on this story: James Callan in New York at jcallan2@bloomberg.net

To contact the editor responsible for this story: Ed Dufner at edufner@bloomberg.net

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.