Union Pacific cuts full-year outlook for volume growth and productivity, says crew availability is ‘stressed’

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Shares of Union Pacific Corp. UNP, +0.15% slipped 0.1% in morning trading Wednesday, after the rail and freight transportation services company lowered its 2021 guidance for volume growth, productivity and operating ratio improvement. The company said it now expects full-year volume growth of 4% over last year, compared with previous guidance provided on Oct. 21 of “closer to 5%.” Productivity guidance was lowered to “approximately $250 million” from $350 million, and operating ratio improvement guidance was cut to “around 150 basis points” from “the neighborhood of 175 basis points.” The lowered outlook comes as Chief Financial Officer Jennifer Hamann highlighted at the Stephens Annual Investor Conference the challenges faced in 2021, including Winter Storm Uri, the Northern California wildfires and supply chain disruptions. “Our freight car velocity and freight car terminal dwell trail last year’s metrics and have lowered our trip plan compliance measures, which we know directly impacts our customers,” Hamann said, according to a FactSet transcript. “Our crew availability is stressed due to the impact of COVID and the vaccine mandate and the just general sluggishness in our service product,” she added. The stock has gained 8.6% over the past three months, while the Dow Jones Transportation Average DJT, +0.91% has climbed 8.5% and the Dow Jones Industrial Average DJIA, +0.59% has slipped 1.7%.

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