US Economy On Track to Grow: Union Pacific CEO
The economy continues to grow slowly, and the upswing should continue through the rest of the year, Jack Koraleski, Union PacificCEO, told CNBC’s “Squawk on the Street” on Thursday.
Koraleski spoke hours after Union Pacific posted record second-quarter earnings.
For the quarter, the railroad’s net income rose to $1 billion, or $2.10 per share from $785 million, or $1.59 a share, a year before.
Operating revenue rose 7 percent to $5.2 billion, in line with estimates.
Union Pacific was able to post the record earnings, he said, because the “good news was able to offset the bad news.” Although coal shipments were weak due to low natural gas prices, “the benefits of our franchise give us the capability of having access into the new shale plays so we're moving a lot of crude oil, frack sand and pipe.”
Coal should pick up later in the year, Koraleski said. “As the summer continues to get hot, we're seeing our coal business get stronger and stronger," he said. “That's going to provide a benefit for us in the second half of the year.”
He also noted the railroad was increasing its shipments of other products that also reflect an economic upturn.
“If you look at the fact that housing starts are improving, you look at our lumber business, our rock business, our stone business, cement, all of those kinds of things are improving,” he said. There’s also been a pickup in the automotive business.
“It tells you that the economy is continuing on a slow growth trajectory, and that's what we really see for the balance of the year,” he said.