Pandemic grips commerce and hits railroader Union Pacific

OMAHA, Neb. (AP) — Union Pacific’s second-quarter profit fell 28% from a year ago as carload revenue tumbled 20% because of the coronavirus pandemic.

But the railroad company expects improvement in the second half with full-year carload volumes to be down around 10% compared with 2019.

The company said Thursday it made $1.13 billion from April through June, or $1.67 per share, beating Wall Street estimates. Analysts polled by FactSet expected earnings of $1.56 per share. Revenue of $4.24 billion was down 24% for the period, slightly below analysts’ estimates of $4.4 billion.

In the second quarter big freight users such as automakers were forced to close their factories for weeks in an effort to slow the spread of the virus.

As a result, Union Pacific’s freight revenue fell as pricing gains were offset by lower volumes and decreased revenue from fuel surcharges, the company said in a prepared statement.

“Our ability to be nimble and flexible in adjusting our resources to rapidly changing volumes, while providing a high-level service product demonstrates the strength of our service model,” CEO Lance Fritz said in the statement.

The Omaha, Nebraska, company’s shares rose slightly in pre-market trading to $179.67.

Union Pacific operates 32,400 miles of track in 23 Western states.