Union Pacific Corporation CEO: Low Oil Prices Are A Win For Us Either Way

Union Pacific Corporation UNP declared better than expected fourth-quarter results on Thursday. Revenues grew 9p to $6.2 billion and EPS was up to $1.61 from $1.27 it posted in the same quarter last year. Jack Kowalski, Union Pacific president & CEO, was on CNBC to share his outlook for US economy and the impact of lower oil prices on the company.

US Economic Outlook For 2015

“Our outlook is actually pretty favourable,” Kowalski said. “We see the economy continuing kind of a nice moderate growth pattern that we saw at the end of 2014.”

He continued, “So, automobile business, if you go back in our fourth quarter auto sales were strong, construction products like stone, sand, gravel, cement, lumber was up 10%. Those were the fundamental building blocks of the economy and it’s also consumer confidence, so we feel good about what’s happening.”

How Are Lower Oil Prices Impacting Your Business?

“Overall when you look at what’s happening in the energy markets today there are a lot of people concerned about the sudden drop and I guess the question that fundamentally is kind of on our minds is how low will it go and how long will it stay there and will it stay there long enough to significantly change people’s behaviour,” Kowalski  said.

 “But from our perspective if the consumers have discretionary spending brought about by the lower gasoline prices and things like that, they are going to be building houses, buying automobiles, furniture, all of such things are sweet spot for our franchise. So, it’s kind of win for us either way. The lower fuel prices are also a help overall.”