Union Pacific (UNP) CEO Fritz Discusses Weak Q2 Report on CNBC

Union Pacific (UNP) CEO Lance Fritz told CNBC's Simon Hobbs today that his outlook for the company is still positive despite a weak 2016 Q2 report.
By Lindsay Rittenhouse ,

NEW YORK (TheStreet) -- Union Pacific (UNP) - Get Report CEO Lance Fritz remains positive despite the railroad operating company's relatively weak 2016 second quarter results, he told CNBC's Simon Hobbs on "Squawk on the Street" Thursday.

Before the market open today, the company reported second quarter earnings of $1.17 per share, down from the previous year's second quarter earnings of $1.38 per share. Union Pacific's revenue slipped by 12% to $4.77 billion. Analysts surveyed by Thomas Reuters were expecting earnings of $1.17 per share, on $4.8 billion in revenue.

"We're still facing some of the very same headwinds we faced in the last four or five quarters," Fritz said. These headwinds include natural gas pricing replacing coal as a source of electricity and the strengthening U.S. dollar affecting exports.

"But we are seeing sequential improvement and that's encouraging," Fritz continued, adding that he is still bullish on coal being "an abundance source of energy."

Improvements are seen in grain, construction products and industrial chemicals, he explained.

Crude oil shipments are "declining pretty dramatically but they're a very small portion of our overall shipments," Fritz added. Shipments in auto parts saw a 9% growth.

Shares of Union Pacific are slipping by 3.11% to $91.19 early Thursday afternoon.

Separately, TheStreet Ratings rated Union Pacific as a "buy" with a score of B.

This is driven by several positive factors, which can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, good cash flow from operations, expanding profit margins and notable return on equity. TheStreet Ratings feels its strengths outweigh the fact that the company has had somewhat weak growth in earnings per share.

You can view the full analysis from the report here: UNP

TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author.

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