Union Pacific is benefiting from improvements in fuel efficiency and lower diesel prices. The freight railroad said Thursday that its net income expanded 7% in the fourth quarter, reaching $1.76 billion, or $2.91 a share, compared with $1.65 billion, or $2.71 a share, a year earlier, as tighter fuel spending and gains in premium freight volumes offset almost flat revenue. Revenue was driven lower by a drop in fuel surcharge revenue and an unfavorable business mix, the company said, even while volume and core pricing picked up.