Union Pacific Q4 Profit Down, Results Miss Estimates

(RTTNews) - Union Pacific Corp. (UNP) reported a profit for the fourth quarter 2015 that declined 22% from last year. Total operating revenue for the quarter dropped 15 percent from the previous year. Quarterly freight revenue decreased 16 percent compared to the fourth quarter 2014, as volume declines, lower fuel surcharge revenue, and negative business mix more than offset core pricing gains.

In the pre-market trade, UNP is currently trading at $72.50, down $1.11 or 1.51%.

Looking ahead for 2016, Lance Fritz, Union Pacific chairman, president and chief executive officer said, "Overall economic conditions, uncertainty in the energy markets, commodity prices, and the strength of the U.S. dollar will continue to have a major impact on our business this year. However, we are well-positioned to efficiently serve customers in existing markets as they rebound."

Net income for the fourth quarter 2015 was $1.12 billion or $1.31 per share compared to $1.43 billion or $1.61 per share, in the fourth quarter 2014. Analysts polled by Thomson Reuters expected the company to report earnings of $1.42 per share for the quarter. Analysts' estimates typically exclude special items.

Total operating revenue for the quarter was $5.21 billion, down 15 percent from $6.15 billion in the prior year quarter. Wall Street analysts had a consensus revenue estimate of $5.45 billion for the quarter.

Fourth quarter business volumes, as measured by total revenue carloads, declined 9 percent compared to 2014. Volumes declined in each of the Company's business groups with the exception of automotive.

In addition, quarterly freight revenue decreased 16 percent compared to the fourth quarter 2014, as volume declines, lower fuel surcharge revenue, and negative business mix more than offset core pricing gains.

Union Pacific's 63.2 percent operating ratio was unfavorable by 1.8 points compared to the fourth quarter 2014. The $1.61 per gallon average quarterly diesel fuel price in the fourth quarter 2015 was 39 percent lower than the fourth quarter 2014.