Trade war weighs on railroad operator Union Pacific

Softness in the domestic auto and industrial sectors have also hit freight volumes

(Reuters) - Railroad operator Union Pacific Corp reported a lower-than-expected quarterly profit, as freight volumes of agricultural products and energy shipments fell.

Last year, the company cut capital spending and jobs, as the U.S.-China trade war worsened the industry-wide slump in freight volumes.

U.S. trade policies and softness in the domestic auto and industrial sectors have also hit freight volumes.

Union Pacific's operating ratio, a measure of operating expenses as a percentage of revenue and a key metric for Wall Street, fell 1.9 points to 59.7% in the fourth-quarter ended Dec. 31, from a year earlier.

Ticker Security Last Change Change %
UNP UNION PACIFIC CORP. 240.78 -3.88 -1.59%

A lower ratio means higher profitability for railroads.

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The Omaha, Nebraska-based company's net quarterly income fell to $1.40 billion, or $2.02 per share, from $1.55 billion, or $2.12 per share, a year earlier.

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Total operating revenue fell 9.5% to $5.21 billion.

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Analysts on average expected a quarterly profit of $2.04 per share and revenue of $5.22 billion, according to IBES data from Refinitiv.

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(Reporting by Ankit Ajmera in Bengaluru; Editing by Vinay Dwivedi)