Union Pacific stock edges lower on efficiency concerns
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Union Pacific (NYSE:UNP) stock sank on Thursday despite a beat on top and bottom line earnings for the second quarter.

Shares of the Omaha-based railroad operator fell about 1.4% at the intraday low before building back slightly into the afternoon session. The loss reversed initial premarket gains prompted by a beat on headline earnings expectations for the second quarter. 

A 60.2% operating ratio that reflected a 510 basis point deterioration from the prior year and a 180 basis point increase sequentially as higher fuel prices hit efficiency. The figure also missed the consensus estimate set at 57.8% by a wide margin. The efficiency miss contrasted sharply with significant sequential improvement from CSX Corporation (CSX) just a day prior.

"As anticipated, the second quarter was a tough one as we limited carloadings and increased expenses to recover network fluidity," CEO Lance Fritz said. "We also experienced record high fuel prices and increasing inflation, adding pressure to our total costs."

For the full year, efficiency impacts are anticipated to continue to impact the operator. Management now expects an operating ratio of âaround 58%â versus a prior forecast of around 55%. That figure too came in worse than Wall Street had expected.
Read more on the results from CSX Corporation.