Union Pacific Profit Falls 22% on Weak Freight Volume
21 1월 2016 - 11:01PM
Dow Jones News
By Tess Stynes
Union Pacific Corp. said its fourth-quarter earnings fell 22% as
the railroad operator continued to face weak freight demand,
especially for coal, which offset benefits from higher prices and
cost-cutting efforts.
The Omaha, Neb., company's shares fell 1.5% to $72.50 in recent
premarket trading as per-share earnings and revenue missed
expectations.
The rail industry has been under pressure from lower commodities
prices that have weighed on demand for coal, a key market. The
sector also is facing increased competition from trucks, as lower
fuel prices make hauling containers and trailers less expensive.
Companies, including Union Pacific, have mothballed locomotives and
furloughed workers to curb costs.
For the three months ended Dec. 31, Union Pacific's total
freight volume fell 9.1% amid declines across all its sectors with
the exception of automotive, which rose 7.7%. Coal shipments
slumped 22% and industrial products volume dropped 16%.
Freight revenue decreased 16% to $4.86 billion amid the weaker
freight volume and a decline in fuel surcharges.
Chairman and Chief Executive Lance Fritz said the economy,
uncertainty in the energy markets, commodity prices, and the
strength of the U.S. dollar will continue to have a major impact
Union Pacific's business this year.
Overall, Union Pacific reported a profit of $1.12 billion, or
$1.31 a share, down from $1.43 billion, or $1.61 a share, a year
earlier. Revenue decreased 15% to $5.21 billion.
Analysts polled by Thomson Reuters expected per-share profit of
$1.42 and revenue of $5.45 billion.
The company's operating ratio rose to 63.2 % from 61.4%.
Last week CSX Corp. reported that its fourth-quarter revenue
fell 13% as lower coal volumes continued to weigh on its
performance. Kansas City Southern is set to report its results on
Friday, and Norfolk Southern Corp. plans to release its earnings on
Jan. 27.
Write to Tess Stynes at tess.stynes@wsj.com
(END) Dow Jones Newswires
January 21, 2016 08:46 ET (13:46 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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