Significantly lower coal shipments have hit rail operator Union Pacific’s 2Q15 income. The company’s operating income totaled US$1.9 billion - down 11% on the same period last year.
“Solid core pricing gains were not enough to overcome a significant decrease in demand, said Union Pacific’s President and CEO, Lance Fritz. “Total volumes in the second quarter were down 6%, led by a sharp decline in coal.”
Coal revenues dropped 31% y/y in the quarter from US$989 million to US$679 million on revenue ton-miles of 31.3 billion – down from 45.5 billion last year. Meanwhile, year-to-date coal revenue is down 18% from US$1.95 billion to US$1.59 billion.
Union Pacific has been particularly hard hit by the drop in coal-fired generation in the US. The company’s main coal cargo is thermal coal from the Powder River Basin, while rivals CSX and Northern Suffolk carry more metallurgical coal.
Written by Jonathan Rowland.
Read the article online at: https://www.worldcoal.com/coal/24072015/union-pacific-suffers-as-coal-shipment-plummet-2628/