Union Pacific Corp. Thursday, citing slumping auto business in particular and the global economic downturn in general, reported a 26% decline in third-quarter profit. Earnings of $517 million, or $1.02 a share, were down from $703 million, or $1.38 a share, notched in the third quarter of 2008.
On a profit-per-share basis, UP did eke past consensus Wall Street analyst estimates of $1.01 a share. Wall Street was nonetheless initially disappointed, with shares of UP down more than 4% on the New York Stock Exchange midday Thursday; shares were recovering some of their losses, down just 3.5%, in midafternoon trade.
Revenue, estimated by Wall Street to be $3.73 billion, fell to $3.47 billion for the third quarter, down 25% from $4.63 bllion a year ago. The fall was led by the 30% decline in UP's auto-freight business and a 39% drop in industrial-products movement.
"As we enter the final quarter of 2009, business volumes seem to have stabilized, but at very low levels for Union Pacific," said Chairman and Chief Executive Officer Jim Young, in a statement. "In this weak economic environment, we remain committed to maintaining a strong balance sheet and a solid cash position."