Union Pacific Profit Falls 19% as Demand Remains Under Pressure
July 21 2016 - 9:19AM
Dow Jones News
By Tess Stynes
Union Pacific Corp. said its second-quarter earnings fell 19% as
freight demand remains pressured, a trend the railroad operator
expects to continue throughout the second half of the year.
For the three months ended June 30, Union Pacific's total
freight volume fell 11% as a 2% increase in shipments of
agricultural products was offset by declines in volume for other
commodities. Coal volume slumped 21% and industrial products volume
dropped 11%. Volume in its intermodal business -- which moves
freight using a combination of trains and trucks -- fell 14%.
Freight revenue dropped 13% as weaker freight volume and fuel
surcharge revenue more than offset higher core pricing.
Chief Executive Lance Fritz said in prepared remarks Thursday
that freight volume is expected to remain under pressure through
the second half of the year, citing the negative impact of the
strong U.S. dollar on exports and relatively weak demand for
consumer goods.
During April, Union Pacific said it expected total volumes for
the year to decline in the mid-single digits.
Over all, Union Pacific reported a profit of $979 million, or
$1.17 a share, down from $1.2 billion, or $1.38 a share, a year
earlier. Revenue decreased 12% to $4.77 billion.
Analysts polled by Thomson Reuters expected per-share profit of
$1.17 and revenue of $4.8 billion.
Operating ratio rose 1.1 percentage point to 65.2%.
Shares fell 2.3% to $92 in recent premarket trading.
Write to Tess Stynes at tess.stynes@wsj.com
(END) Dow Jones Newswires
July 21, 2016 09:04 ET (13:04 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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