(Bloomberg News circulated the following on June 19.)
NEW YORK — Union Pacific Corp., the largest U.S. railroad, may carry less corn in the fourth quarter because of flooding in Iowa and other Midwestern states, Chief Executive Officer James Young said.
The railroad lifted service embargoes today on its east-west Iowa main line after delaying shipments as a result of the flooding, marketing chief Jack Koraleski told customers of Omaha, Nebraska-based Union Pacific in a letter. “Operations remain limited,” he said.
“We’ve had a heck of a challenge, the whole rail industry,” Young said at a Merrill Lynch & Co. transportation conference in New York. “Every railroad that operates in Iowa was shut down or is shut down.”
Returning Union Pacific’s operations to normal will take several weeks, Young said. The railroad kept its embargo on traffic to and from Cedar Rapids, Iowa, where Union Pacific “was hardest hit,” Koraleski said in the letter.
The railroad on June 17 said severe weather in the Midwest will reduce its profit this quarter by about 5 cents a share.
“Basically we lost our upside here because of the hits we’ve taken,” he said. Young affirmed the full-year earnings forecast of $3.88 to $4.13 a share. Analysts expect $4.07, the average of 12 estimates compiled by Bloomberg.
Union Pacific rose $1.24, or 1.6 percent, to $77.06 in early New York Stock Exchange composite trading. The shares gained 21 percent this year before today.