Union Pacific Corp. reported 263,900 carloads of coal deliveries in the third quarter, down 17.3% from 319,200 carloads in the year-ago period.
The company cited continued challenges in the coal market as a significant factor driving its overall energy-related revenues to $975 million, down 20% year over year. The company's petroleum, liquefied petroleum gas and renewables carloads delivered rose by about 18.3% compared to the year-ago quarter.
Kenny Rocker, executive vice president of marketing and sales for the railroad company, pointed to soft coal market conditions resulting from lower natural gas prices and a decline in export demand. Contract changes and plant retirements also impacted the company's coal volumes in the quarter.
"We also expect coal to experience continued challenges with volumes throughout the balance of the year, and weather conditions will always be a key factor for coal demand," Rocker said during an Oct. 17 conference call.
Overall, Union Pacific reported 2019 third-quarter net income of $1.55 billion, or $2.22 per diluted share, compared to $1.59 billion, or $2.15 per diluted share, in the year-ago quarter. Growth in Union Pacific's industrial volumes was "more than offset" by declines in agricultural products, premium and energy shipments, it said. Operating revenue of $5.52 billion was down 7% in the third quarter compared to the year-ago quarter.
"Given the challenging volume environment, we delivered solid third-quarter financial results, including an all-time best quarterly operating ratio of 59.5%," Union Pacific President and CEO Lance Fritz said in a statement.