Union Pacific Profit Tops Reduced Estimates
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Union Pacific Corp. reported profit that topped analysts’ estimates, which had been adjusted down in the last month, as the railroad leaned on efficiency to make up for lower carloads and higher labor costs.
Earnings were $2.51 a share, down from $3.05 a year earlier, Union Pacific said Oct. 19 in a statement. Analysts had predicted $2.41 on average, an estimate that had been lowered by more than 20 cents since mid-September. Sales were $5.9 billion.
“We faced many challenges in the quarter, including continued inflationary pressures and a drop in carloads,” CEO Jim Vena, who took over for Lance Fritz on Aug. 14, said in the statement. “Operationally we gained momentum through the quarter.”
Vena, who helped improve Union Pacific’s efficiency as chief operating officer for two years through the end of 2020, has been charged with improving Union Pacific’s service and customer relations. Those had deteriorated amid an influx of goods during the pandemic while the railroad grappled with hiring enough workers to meet demand.
Union Pacific CEO Jim Vena shares our progress towards being the best at Safety, Service and Operational Excellence in this letter to Team UP. Read Jim's comments at https://t.co/Xkm1685RZf . — Union Pacific (@UnionPacific) October 19, 2023
A freight recession this year has eased some of those service pressures, but has taken a toll on profit, especially after a new five-year labor contract in December that increased pay and time off for workers. Union Pacific also faced network disruption and other costs after Hurricane Hilary flooded and washed out track in August.
Carloads fell about 3% in the quarter from a year earlier, the railroad said.
Union Pacific’s shares rose less than 1% before regular trading in New York.
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