Salem Radio Network News Friday, December 3, 2021

Business

Union Pacific cuts 2021 volume growth forecast as supply woes set to bite

(Reuters) -U.S. railroad operator Union Pacific Corp on Thursday cut its full-year volume growth forecast, as worsening supply chain disruptions are expected to hit shipments across a sector considered critical in connecting most consumer and industrial businesses.

Congestion at ports, mainly in California from where Union Pacific hauls freight, and fewer trucks to make “last-mile” deliveries have hit the company’s volumes during the quarter, which were flat.

Union Pacific, which operates in 23 states and connects East Coast ports to key terminals like Chicago, said it expects https://www.up.com/cs/groups/public/@uprr/@investor/documents/investordocuments/pdf_unp_3q21_er_slides.pdf 2021 volume growth of 5% versus a 7% growth it had forecast earlier.

The company’s quarterly profit, however, rose 23% as it shipped more chemicals, metals, minerals, paper and plastics to meet U.S. industrial demand.

A rise in U.S. industrial production during the first two months of the quarter and a jump in crude prices benefited the company.

Revenue carloads, or business volumes, were flat at 2.04 million, as supply chain disruptions and a bridge outage in California took a toll.

Union Pacific’s third-quarter total operating revenue rose 13% to $5.57 billion, beating average analysts’ estimate of $5.41 billion, according to Refinitiv I/B/E/S.

The Omaha, Nebraska-based company’s net income rose to $1.67 billion, or $2.57 per share, for the quarter ended Sept. 30, from $1.36 billion, or $2.01 per share, a year ago.

Analysts, on average, had expected a profit of $2.49 per share.

(Reporting by Abhijith Ganapavaram in Bengaluru; Editing by Shailesh Kuber)

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