Union Pacific Corp.'s coal shipments are down 25% so far in the
second quarter and the railroad operator doesn't expect much
improvement for the rest of the period, Chief Financial Officer
Robert M. Knight Jr. warned.
That is much steeper than the midsingle-digit decline company
executives had forecast last month.
At a transportation industry conference Wednesday, Mr. Knight
attributed the weak coal shipments to low natural-gas prices as
well as very mild weather. Union Pacific started this year with its
utility base "having above the five-year average under inventory
stock piles," he added.
"I think it is safe to say right now that it looks like coal is
going to be a continuing challenge for the balance of the year,"
Mr. Knight added.
He reiterated that Union Pacific remains focused on realigning
its resources to reflect demand, improve service and reduce costs.
However, despite furloughing additional employees and placing more
locomotives back in storage, the company's second-quarter
performance still will reflect the effects of operating
efficiencies, he added.
Write to Tess Stynes at tess.stynes@wsj.com
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