Union Pacific posts weak profit as storm delays shipments
Reuters
Published Jan 24, 2023 07:53AM ET
Updated Jan 24, 2023 08:40AM ET
(Reuters) - Union Pacific Corp (NYSE:UNP) reported lower-than-expected fourth-quarter profit on Tuesday, hurt by delayed shipments amid labor shortages and a winter storm that crippled freight operations across the United States.
"We continued to face challenges hiring craft professionals in critical locations and experienced the impact of extreme winter weather on our network in December," Chief Executive Lance Fritz said.
Union Pacific, which connects 23 states in the western two-thirds of the country by rail, suffered shipment delays over the Christmas period as the winter storm Elliott hit its railroad networks.
The storm brought sub-freezing temperatures and impacted business operations nationwide, also causing freeze-ins at several oil production sites.
Union Pacific's operating ratio, a key profitability metric for railroads, was 61% in the quarter compared with 57.4% a year earlier. The lower the ratio is, the better.
"Revenue growth was more than offset by elevated operating expenses from operational inefficiencies and a higher inflationary environment," Fritz said.
Still, price hikes aided by higher intermodal and auto shipments helped the railroad operator to post a near 8% rise in total operating revenue to $6.18 billion.
The company, which operates from all major West Coast and Gulf Coast ports to eastern gateways, added it expected volume growth for 2023 to exceed industrial production.
Its net income fell 4% to $1.64 billion, or $2.67 per share, in the quarter ended Dec. 31, from $1.71 billion, or $2.66 per share, a year earlier. Analysts on average had forecast a profit of $2.78, Refinitiv IBES data showed.
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Written By: Reuters
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