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Union Pacific raises operating ratio forecast for 2018

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Union Pacific raises operating ratio forecast for 2018

Union Pacific Corp. shares rose Jan. 10 after the U.S. railroad operator said a key performance metric for 2018 would come in better than anticipated.

The company, which transports coal, consumer goods and agricultural and industrial products, said Jan. 9 that it now expects its full-year 2018 operating ratio to improve 0.1 point year over year to 62.7%. Union Pacific had previously said it was not expecting its full-year operating ratio to improve from 2017 amid slowing revenue growth and higher costs related to employee severance and operational inefficiencies.

Shares of Union Pacific finished the day up 2.86% at $154.66.

The improved outlook was due to carloadings in December 2018 that came in stronger than expected, led by international container imports, according to Union Pacific CFO Rob Knight.

"We are also encouraged to see improved cost performance driven by early results from our Unified Plan 2020 implementation," Knight said, referring to the company's new operating plan, which aims for a 60% operating ratio by 2020.

The company will report its fourth-quarter 2018 earnings Jan. 24.