In addition to manufacturers and sellers of things now eschewed by recession-damaged consumers, companies that transport those goods wouldn't be expected to be doing all that well.
But Union Pacific
Even though UNP's freight volume slumped 12% during the dismal fourth quarter, lower fuel costs along with productivity enhancements and more favorable pricing helped the carrier raise its net income by 35% to $661 million, or $1.31 per share, from $491 million a year earlier, or 93 cents.
UNP's stock price crumbled from the mid-$80s in late August to the high $30s earlier this month before a modest rebound to the low- to mid-$40s. Goldman Sachs raised its rating to "buy" from "hold" last month.TheStreet.com Ratings' quantitative evaluation model assigns UNP an overall grade of B-minus, which equates with a cautions "buy" recommendation.
As can be seen in the accompanying table, the company's precipitous price decline contributed to a "risk grade" of D-plus while its attractive p/e ratio helped it achieve a "reward grade" of A-minus.
Union Pacific, the nation's largest rail carrier, operates more than 32,000 miles of track across 23 western and Gulf Coast states. While its shipments of automobiles sank 17% in the fourth quarter, energy shipping climbed 20%, while the agricultural business advanced 10%.
For fiscal 2008, which ended Dec. 31, UNP's earnings per share climbed 32% to $4.54 on a 4.5% advance in revenue to $16.3 billion.