Union Pacific Q2 earnings drop

The railway reported second quarter net income of $1.2 billion, down 7.2 percent compared with the second quarter of 2014.    Union Pacific Corporation reported net income of $1.2 billion in the second quarter of 2015, down 7 percent compared to the second quarter of 2014. The railway decreased diluted earnings per share from $1.43 to $1.38 per diluted share in the quarter, a 3 percent decline from the previous year.
   Operating revenues reached $5.4 billion for the second quarter, down 10 percent from the second quarter of 2014. Core pricing gains were hindered by a decrease in volumes, lower fuel surcharge revenue and a negative business mix, Union Pacific said in a statement.
   The railway’s operating ratio was 64.1 percent, 0.6 percentage points worse than the previous year’s second quarter.
   Business volumes, as measured by total revenue carloads, were down 6 percent from the second quarter of 2014. Union Pacific President and CEO Lance Fritz said the decrease was attributed to a sharp decline in coal volumes. UP also saw volumes drop significantly for industrial and agricultural products, Fritz added.
   In individual business segments, compared to the second quarter of 2014, freight revenues for coal were down 31 percent; industrial products down 14 percent; agricultural products down 7 percent; intermodal down 5 percent; and chemicals were down 1 percent. Automotive revenues were up 3 percent.
   “While the volume outlook remains uncertain, we remain laser focused on operating safely and efficiently no matter what the market environment,” said Fritz. “We will continue to reduce costs and improve productivity as we further align resources with demand.”