Union Pacific railroad's quarterly profit falls 19% as volumes slow and costs remain high

abcnews.go.com:

Union Pacific's third-quarter profit fell 19% as the railroad hauled about 3% 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

OMAHA, Neb. — 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, railroad 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 it tops the per-share earnings of $2.42 that Wall Street was expecting, according to a survey of analysts by FactSet Research.

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.

But the average speed of the railroad’s trains increased to 200 daily miles per car. Other productivity measures also improved during the quarter.

Train speed has continued to improve this month to about 210 daily miles per car today, but Vena said he wants to see that keep getting better to reach the 220s that Union Pacific used to deliver before the pandemic.

“Union Pacific has the capability and will be the most efficient railroad,” said Vena, who took the job in August.

One of Vena's initial moves has been to try to push decision-making lower down in the operation and eliminate layers of bureaucracy, so the railroad can react more quickly. More cuts are likely but major changes aren't expected