UPDATE 2-Union Pacific sees record profit despite coal slump

* Q2 EPS $2.10 vs $1.97 Wall Street view

* Revenue up 7 pct to $5.2 bln, in line with estimates

* Sees record 2012 profit despite coal, uncertain economy

* Shares up 3.1 percent

By Lynn Adler

July 19 (Reuters) - Union Pacific Corp beat quarterly profit estimates on Thursday, and the top U.S. publicly held railroad forecast record full-year earnings, as higher pricing and growing demand for most products it ships offsets weak coal volume.

Union Pacific posted record earnings per share in the second quarter, driven by higher volume of automotive, chemicals, industrial products and intermodal shipments.

Revenue rose in all businesses except coal, which fell 9 percent, as a mild winter and low natural gas prices sapped demand from utilities. Auto-related shipping revenue led with a 25 percent increase in the quarter.

"Looking ahead to the second half of the year, the global economic outlook has become more uncertain and coal volumes remain a challenge," Chief Executive Jack Koraleski said.

But the company expects some customers to pull business back to the United States, which can bolster shipping volume, he said in an interview.

The U.S. economy is "a slow, continually improving kind of a deal with automobiles being bought, housing starts improving -- it's not lights out by any stretch of the imagination."

Union Pacific is not giving specific third-quarter or 2012 earnings guidance.

"We're saying that we will have positive volume before the year is out and offset any problem we have with coal," said Koraleski. "We will have record financial results."

The company's shares were up 3.1 percent in midmorning trading at $122.23, and up 15 percent so far this year. The S&P 500 is up about 9 percent this year.

Union Pacific said it raised core pricing to shippers by 4.5 percent in the quarter.

Coal has also hit bottom and started to rebound as steamy summer weather increase demand utilities burning coal to power air conditioning, the company's executives told analysts on a conference call.

Omaha, Nebraska-based Union Pacific reported net income rose to $1 billion, or a record $2.10 per share in the second quarter, up from $785 million, or $1.59 a share, a year before.

Operating revenue rose 7 percent to $5.2 billion, in line with estimates.

Hauling shale, crude-oil and related products will continue to grow, also offseting soft coal demand, the company said.

"By the end of 2013, oil carloads linked to the Bakken should be a measurable contributor to volume growth," Jefferies & Co. analysts wrote in a note.

Union Pacific is the third major U.S. railroad to report quarterly results, after CSX Corp and Kansas City Southern Corp on Tuesday.

Both smaller railroads said they did not expect significant increases in demand for coal shipments by utilities this year, but said the sector had passed the worst of its slump.