Union Pacific Profit Falls 13% on Demand Woes
20 10월 2016 - 10:29PM
Dow Jones News
By Tess Stynes
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 09:14 ET (13:14 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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