Union Pacific Rides Tax Rate to Earnings Beat

Union Pacific Corporation (UNP) reported fourth quarter earnings of $1.56 per share on $4.4 billion in revenue, topping Wall Street’s expectations. But a vague 2011 outlook pushed shares lower in early trading.

Analysts were expecting a profit of $1.48 per share and slightly lower revenue ($4.35 billion). However, much of the earnings beat can be attributed to the company’s effective tax rate, which fell to 34.3% from 36.8% a year ago.

The railroad operator’s net income of $775 million beat last year’s figure by 41% , while sales rose 17%.

The company didn’t give much in the way of hard 2011 guidance, opting instead for some vague corporatespeak about customer service driving future success, which is likely the reason shares are down despite the record quarter.

Shares are trading at $94.26 (-3.12%), where they carry a 1.61% dividend yield.

Union Pacific raised its dividend twice last year, including a 15% dividend hike in November. The company has increased its dividend rate by 280% since 2001.

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