Coal news and updates

Coal shipments down 25% so far in quarter: Union Pacific

Union Pacific Corp’s coal shipments are down 25% so far in the second quarter and the railroad operator doesn’t expect much improvement for the rest of the period, Chief Financial Officer Robert M. Knight Jr. warned.

That is much steeper than the midsingle-digit decline company executives had forecast last month.

At a transportation industry conference Wednesday, Mr. Knight attributed the weak coal shipments to low natural-gas prices as well as very mild weather. Union Pacific started this year with its utility base “having above the five-year average under inventory stock piles,” he added.

“I think it is safe to say right now that it looks like coal is going to be a continuing challenge for the balance of the year,” Mr. Knight added.

He reiterated that Union Pacific remains focused on realigning its resources to reflect demand, improve service and reduce costs. However, despite furloughing additional employees and placing more locomotives back in storage, the company’s second-quarter performance still will reflect the effects of operating efficiencies, he added.

Sourcce: Wall Street Journal