OMAHA, Neb. (AP) - Union Pacific finished last year with a strong 22 percent jump in fourth-quarter profit, but volatile energy prices are making it difficult to predict how 2015 will unfold.
The railroad is confident the economy should continue growing at a moderate pace and Union Pacific expects to again haul more freight this year.
Crude oil prices, now well below $50 per barrel, make it hard to forecast shipments of everything from crude oil to the sand used in the hydraulic fracturing wells that have boomed over the past decade.
"Nobody that I can find expects that this is going to be a long-term trend," CEO Jack Koraleski said. "And certainly no one at this point in time has made any decisions to alter long-term capital facility expansions or things like that. I think it's just way too early to see if this is a sustainable trend in energy prices."
Falling energy prices can be a positive for railroads because consumers will have more money to spend, and that could boost shipments of building materials, cars and other goods.
It also means cheaper fuel for railroads. In the fourth quarter, Union Pacific's average diesel price fell 14 percent to $2.66 per gallon.
Investors sent Union Pacific's shares up nearly 5 percent to $119.92 after the Omaha, Nebraska, railroad beat Wall Street expectations
Union Pacific earned $1.43 billion, or $1.61 per share, in the quarter. That's up from $1.17 billion, or $1.27 per share, last year.