UNP Union Pacific Corp

Union Pacific Corp. said its third-quarter earnings fell 13% as the railroad operator, like others, said it continued to be hit by weak demand for commodities it transports.

The Omaha, Neb., company's shares, up 24% this year, fell 3.1% to $94.12 in recent premarket trading as the results missed expectations.

Union Pacific's total freight volume declined 5.8%, led by a 14% drop in coal volume. Shipments in its intermodal business, which moves freight using a combination of trains and trucks, declined 6.7% and industrial products volume dropped 11%. Agricultural volume, which rose 11%, was the only exception.

Freight revenue dropped 7.2% on the weaker freight volume and lower fuel surcharge revenue that offset benefits from higher prices.

The weaker demand was partly offset by lower operating expenses, which declined 4.2%.

In prepared remarks Thursday, Chief Executive Lance Fritz said sectors such as grain and energy "are showing signs of life" though challenges continue from the broader economy, a relatively strong U.S. dollar and soft demand for consumer goods.

Over all, Union Pacific reported a profit of $1.13 billion, or $1.36 a share, down from $1.3 billion, or $1.50 a share, a year earlier. Revenue decreased 7% to $5.17 billion.

Analysts polled by Thomson Reuters expected per-share profit of $1.40 and revenue of $5.18 billion.

Last week CSX Corp. reported weaker third-quarter results as slumping coal shipments continued to pressure its results, though cost-cutting efforts helped the company's performance beat expectations.

On Tuesday, Kansas City Southern's third-quarter results also declined as revenue was dented by weak freight volume, led by declines in crude and frac sand shipments. The company said events such flooding outages and service disruptions on its Mexican network also resulted in additional operating costs.

Norfolk Southern Corp. is set to report on Oct. 26.

Write to Tess Stynes at tess.stynes@wsj.com

(END) Dow Jones Newswires

October 20, 2016 09:25 ET (13:25 GMT)

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