Union Pacific Corp. cut its outlook for second-half volumes, after the railroad operator said third-quarter volumes were softer than anticipated. The stock gained 0.4% in morning trading Wednesday, after falling 1.6% on Tuesday. Chief Financial Officer Robert Knight said at the Cowen and Company Global Transportation Conference, according to a transcript provided by FactSet, that after weaker-than-expected third-quarter volumes, "our thinking is that volume for the second half will now be down mid-single digits versus 2018." In July, Knight had said that his "best thinking at this point" is that second-half volume will be down around 2% or so versus 2018. Knight said Wednesday, however, that he remained confident that "the dollars we yield from our pricing initiatives will again well exceed our rail inflation costs in 2019." As a result, with margins expected to improve in the second half of the year, Knight said previous guidance of a "sub-61% operating ratio" in 2019 remains intact. The stock has shed 6.1% over the past three months, while the Dow Jones Transportation Average is little changed and the Dow Jones Industrial Average has gained 3.9%.
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