Union Pacific 2Q Profit Sank On Weak Consumer Demand

By Ben Glickman

Union Pacific Corporation's second-quarter profit missed estimates as the company saw lower shipment volumes on weaker consumer demand and inflation.

The Omaha, Neb.-based railroad freight company reported profit of $1.569 billion, or $2.57 a share, in the second quarter, compared with $1.835 billion, or $2.93 a share, in the year-ago quarter. Analysts polled by FactSet expected per-share earnings of $2.76.

Union Pacific's sales fell 5% to $5.963 billion in the quarter, missing the $6.09 billion forecast by analysts surveyed by FactSet.

The company's revenue sank because of lower volumes and fuel surcharge income. Business volumes, which the company measures in terms of total revenue carloads, fell 2%.

Chief Executive Officer Lance Fritz said softer consumer demand and inflation weighed on results in the quarter. A one-time labor expense of $67 million also ate into the company's profits.

The company also said Fritz would be succeeded by Jim Vena as CEO, one of several changes to the board of directors.

The company's derailment rate in the first half of the year improved 9% compared to the prior year.

Write to Ben Glickman at [e-mail]

(END) Dow Jones Newswires

July 26, 2023 08:21 ET (12:21 GMT)

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