Union Pacific cuts 2021 volume, operating ratio growth forecast

Union Pacific cuts 2021 volume, operating ratio growth forecast

Union Pacific Corp (UNP.N) cut its full-year forecast for volume and operating ratio growth on Wednesday, as supply chain logjams pressure the U.S. railroad operator’s volumes.

The Nebraska-based company, in a regulatory filing, said it expects 2021 volumes to grow about 4% from around 5% growth it had forecast in October. It had expected a volume growth of about 7% earlier in the year.

Union Pacific’s intermodal and automotive shipments, which are key revenue drivers, have been hit by supply chain problems, such as logjams at ports, truck driver and chip shortages.

Operating ratio, a key profitability metric, is expected to rise about 150 basis points, down from the 175 points Union Pacific had forecast earlier.

Shares of Union Pacific, which operates in 23 states and connects East Coast ports to key terminals like Chicago, pared gains to trade about flat in the afternoon session.

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