OMAHA, Neb. (AP) — Union Pacific's third-quarter profit fell 19% as the railroad hauled fewer shipments and costs remained high, but the average speed of its trains improved 5% as new CEO Jim Vena began to tweak the operations.
The Omaha, Nebraska- based railroad said it earned $1.53 billion, or $2.51 per share, during the quarter, That's down from $1.9 billion, or $3.05 per share. But the results topped the $2.42 that 12 analysts surveyed by FactSet Research expected.
The number of shipments Union Pacific delivered slipped 3% in the quarter, and while costs improved about 4% they remained elevated at $3.76 billion.
The railroad's revenue slipped 10% to $5.9 billion because of the lower volume and the lag between when fuel prices increase and when Union Pacific's fuel surcharge kicks in.
"We faced many challenges in the quarter, including continued inflationary pressures and a drop in carloads," said Vena, who took the job last month. But the average speed of the railroad's trains increased to 200 daily miles per car. and other productivity measures also improved.
"We are aligning the team around our strategy focused on being the best in safety, service, and operational excellence as we drive growth to the railroad," he said.
Vena will likely give more details about his plans to steadily improve the railroad's operations Thursday. More cuts are possible but major changes aren't expected because the railroad already overhauled its operations several years ago.
Union Pacific is one of the nation's largest railroads and operates more than 30,000 miles of track in 23 western states. Safety has been a key concern for the industry this year ever since a Norfolk Southern train derailed in eastern Ohio in February. UP and the other major railroads are working to improve safety although they already have a record of being the safest way to transport cargo over land.