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Union Pacific Rolls on Despite Coal Slowdown

Robert Knight, CFO of Union Pacific, says the railroad continues to profitably roll on despite the drop in coal shipments.

 

Transcript:

and of robert rubbermaid shares of union pacific are up over thirty six percent in the past year almost double the s and p was shot well i think the worker recognized the value of union pacific from one of things that we’ve talked at great length about it we’ve actually become walking or here is a diversity of our franchise but even with four cold winds make significant significant layoffs which they are thrust into to rails we stepped up with a letter urging larger diversity refreshing repression with things like the whole feel like is something that you city is well situated to capitalize on the lower natural gas prices have driven large movements of chemicals which is a fabulous business profiles is doing extremely well on what this story came out of fourteen and a half which is actually stronger than what had been part of that that annual sales rate so far business is well situated to leverage the diversity of what’s happening in our economy so i think the reserve stock prices up is we we’ve been doing a great job of laying out the leverage in that morning turning into good margins in the market recognizes that well a common perception that wall street is that your business is very tight to call the coal industry has suffered a very large downturn tell me how do you do it how did you arrive despite the downturn in the polls yet park for four point drop about twelve percent here today i i’m well sequentially released a courtroom in effect just to give you a metric ton at the low point arc powder river basin shipments where we originate called we were running about twenty three trains per day to day running over thirty transfer date so of improved sequentially is i thought it would force of about twelve percent year over year so how had we fill the void was really with all these the commodities shale play is up dramatically we expect expected to be almost a hundred percent improvement this year from where it thousand two thousand eleven with that removal of sand and the troops are ago when the drilling process but we also have to move the unit will train stopped i was doing well and said the bill will boatload of to gas prices chemicals used on what we also have a very favorable but first we political manifesto franchise’s third of the products will be moving construction materials sand gravel he’ll rock all always showing some life and even believe in the housing is starting to show some life so we see some of surprises there and speaking of commodities and what about agricultural products because the drought certainly in the midwest this past summer had that effect he said yeah we just gave back this morning actually found the source speaking on where we said we expect that from the second half of the year before and i’m going to be slightly down bob given the drugs that speed you know we said slow single digits kind of book decrease from last year sort of in the world but your point you have this unprecedented levels of blood drops leading our territory and we survived quite well against the good diversity of our business overall table but come on the blackboard and that’s one of the ballot box for sure what about consolidation in the rail industry research and received by rail in america this summer and expect any more than that you know i really don’t you might see some rationalization on the shorter lines like that that was but in terms of the class one railroads right now we work very well together we don’t we don’t do that there’s a need for a merger we do to interchange traffic with one another for customer satisfaction quite well is into real driver of the burning platform if you will from the beginning are more consolidations finally a sign from the stability that the rails provide especially compared to some of the internet plays out there like groupon facebook and zynga heels yosef a nice dividends to around two percent of any plans to hike back to where we are expectations yeah we gave guidance that we thought are we planning on having a thirty percent dividend it’s about the operational we’ve been working towards that so that suggests that are earnings continue to improve hard evidence additional troops along with earnings and that’s how we look at it we will look at both the government which has been up nicely pointed out over the last two years and share buyback and we look at having a solid evidence that three percent pay out one hour meeting that has earnings growth growing governor will continue to grow and that the opportunistic with or share buybacks and that’s how we approach a merger your own virtual impunity ritual usually this market is fueled by left convinced that the statement as a stock hit its mark welcome to the five billion pounds