Union Pacific’s results are disappointing as railroad faces ‘uncertain environment’

Key Takeaways

• Union Pacific reported that it faced an uncertain economy and earnings and revenues missed forecasts.
• The freight rail giant saw sales of energy and automobiles fall.
• Union Pacific shares fell 4% Thursday morning.

Union Pacific (UNP), the major freight railroad operator, saw its shares fall Thursday after it missed its quarterly profit and sales targets due to slumping energy and automobile shipments as well as lower fuel surcharges.

The company reported a first-quarter earnings (EPS) per share of $2.70, on a revenue of $6.03 Billion that was essentially flat. Visible Alpha surveyed analysts who were expecting $2.75 billion and $6.07billion respectively.

The carrier's 7% increase in volume and higher prices were offset by "business mix, reduced fuel surcharge revenue, lower other revenue, and impact from leap year." Energy and specialized markets freight revenue dropped 7% to 633 million dollars, automotive freight sales fell 5% to 581 million dollars, and food, refrigerated, and frozen shipment revenue was down by 9% to 260 million dollars.

CEO Jim Vena said Union Pacific "worked closely with our customers to meet their needs in an uncertain environment."

Including today's 4% declines, shares of Union Pacific have lost about 7.5% this year.