Union Pacific Warns Of Weaker-Than-Expected 2nd-Half Volumes
September 04 2019 - 09:56AM
Dow Jones News
By Colin Kellaher
Union Pacific Corp. (UNP) on Wednesday warned that freight
volumes in the second half of the year would be weaker than
previously expected, as the rail industry grapples with slumping
traffic.
The Omaha, Neb., freight railroad said it now expects volumes
will decline in the mid-single digits in the second half.
Union Pacific in July had forecast freight volumes would be down
about 2% in the second half following a 3% drop in the first
half.
However, U.S. railroads have been posting large weekly declines
in traffic, according to data from the Association of American
Railroads.
In its most recent report, the AAR said U.S. rail traffic
tumbled 5.9% in the week ended Aug. 24 after falling 5.2% a week
earlier. U.S. rail traffic fell 5.5% for the month of July,
according to AAR data.
In an investor presentation posted on its website, Union Pacific
said third-quarter carloadings through Sept. 1 are down 7%.
Despite the volume shortfall, Union Pacific said it still
expects to achieve an operating ratio below 61% for the year, with
the measure falling below 60% by 2020.
Operating ratio is a closely watched metric that measures the
percentage of revenue consumed by expenses, where a lower figure
represents an improvement.
Write to Colin Kellaher at colin.kellaher@wsj.com
(END) Dow Jones Newswires
September 04, 2019 09:41 ET (13:41 GMT)
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