Union Pacific Corp. said Thursday that its fourth-quarter profit soared 41 percent as the U.S. economy continued to gain momentum and the railroad's shipping volume increased.

The Omaha-based company reported net income of $775 million, or $1.56 per share. That's up from $549 million, or $1.08 per share, a year ago.

Union Pacific Chairman and CEO Jim Young said the economy's gradual improvement translated into a 9 percent increase in shipping volume during the last three months of 2010.

"As we look ahead to 2011, we are encouraged by signs of a slowly strengthening economy," Young said.

Investors watch Union Pacific's results closely because the volume of crops, chemicals, cars, lumber and containers of imported goods it carries offer insight into the health of those industries.

Revenue was up in all six sectors of UP's business in the quarter. The biggest growth came in industrial products and intermodal shipping, in which the railroad moves containers taken off ships and trucks. Union Pacific's total revenue rose 17 percent to $4.4 billion from last year's $3.8 billion.

Analysts surveyed by Thomson Reuters predicted quarterly earnings per share of $1.48 on revenue of $4.35 billion.

About 1,500 Union Pacific employees remained furloughed at the end of 2010, down from 4,200 at the end of 2009. The railroad has been gradually hiring back employees as shipping volumes improved.

The railroad still had 35,000 railcars and 1,050 locomotives stored at the end of 2010, but that's also reduced from last year when Union Pacific had 44,000 railcars and 1,600 locomotives stored because shipping volume had slowed considerably.

Union Pacific is the nation's largest railroad with 32,400 miles of track crossing 23 states from the Midwest to the West and Gulf coasts.