Key Takeaways

• Union Pacific reported lower-than-expected third-quarter profit and revenue as it had a softer business mix and fuel surcharge revenue fell.

• The train operator's freight revenue increased, while other revenue tumbled.

• Union Pacific said current quarter results would mirror the third quarter, which would miss profit and sales forecasts.

Union Pacific (UNP) shares tumbled 5% Thursday when the big freight train operator posted worse-than-anticipated results and guidance on a weaker business mix and reduced fuel surcharge revenue.

The company reported third-quarter earnings per share (EPS) of $2.75, with revenue increasing 2.5% year-over-year to $6.09 billion. Analysts surveyed by Visible Alpha were looking for $2.80 and $6.14 billion, respectively.

Freight revenue was up 4% to $5.77 billion, but other revenue sank 18% to $323 million.

Union Pacific Says Q4 Results 'Expected To Be Consistent Sequentially'

Union Pacific noted that current-quarter results are "expected to be consistent sequentially from (the) third quarter." If so, then both net income and revenue would fall below estimates from Visible Alpha.

Shares of Union Pacific are down about 7% year-to-date.

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