Profit: Union Pacific reported a profit of $1.569 billion, or $2.57 per share, in the second quarter. This is a decrease from $1.835 billion, or $2.93 per share, in the same quarter last year. Analysts were expecting per-share earnings of $2.76.
Sales: The company’s sales declined by 5% to $5.963 billion in the second quarter, missing the forecast of $6.09 billion.
Factors Affecting Performance
Lower Shipment Volumes: Union Pacific’s revenue was impacted by lower volumes and fuel surcharge income. Business volumes, measured in terms of total revenue carloads, fell by 2%.
Consumer Demand and Inflation: Chief Executive Officer Lance Fritz attributed the weaker results to softer consumer demand and inflation.
Labor Expense: A one-time labor expense of $67 million also affected the company’s profits for the quarter.
- New CEO: Jim Vena will be taking over as CEO of Union Pacific Corporation, succeeding Lance Fritz. This change is part of several changes to the board of directors.
- Derailment Rate: Union Pacific’s derailment rate for the first half of the year improved by 9% compared to the previous year.
Written by Ben Glickman