US rail operator, Union Pacific, has reported net quarterly income on nearly US$1 billion in 1Q16 – down from about US$1.2 billion in 1Q15 – as coal freight revenues collapsed.
Coal revenues were down 43% y/y of coal demand for utilities slumped on the back of warm winter weather, continued competition for low-price natural gas and high utility stockpiles.
“This year has brought a continuation of many of the same trends we experienced throughout most of 2015,” said Lance Fritz, Chairman, President and CEO of Union Pacific.
"An energy market recession, low commodity prices, the strength of the U.S. dollar in a soft global economy, and muted domestic retail demand all contributed to market weakness across many of our business lines.”
Volumes also fell for industrial products, agricultural products and intermodal, while chemicals volumes were flat on declines of crude oil and fertilizer shipments. Operating revenue fell to US$4.8 billion in 1Q16, 14% down on 1Q15.
Edited by Jonathan Rowland.
Read the article online at: https://www.worldcoal.com/handling/21042016/union-pacific-revenues-fall-on-coal-collapse-2016-648/