Eric Butler, Union Pacific's vice president of marketing, said shipments of crude oil are expected to continue growing in 2013, although not quite as much as last year.
"Crude oil will be one of the strongest parts of our business," Butler said.
The growth in automotive shipping, particularly from Mexico, and intermodal shipping, in which the railroad moves containers taken off ships and trucks, should also help Union Pacific.
Citi Research analyst Christian Wetherbee said in a research note said the long-term outlook for Union Pacific appears bright even if the fourth-quarter was helped by several unusual items. Wetherbee said UP benefited from a lower tax rate, lower interest expenses and higher-than-normal income outside of its main segments.
Wetherbee said even though UP lost one coal contract, it was able to re-price several other long-term coal contracts at significantly higher prices, which should boost earnings this year.
And Knight said if the economy continues growing this year, the railroad could see a small increase in total volume in 2013.
For all of last year Union Pacific's net income surged 20 percent to $3.94 billion, or $8.27 per share, on revenue of $20.93 billion. That's up from 2011's $3.29 billion, or $6.72 per share, on revenue of $19.56 billion.
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Union Pacific Corp.: www.up.com