Summary
Union Pacific Corporation (UNP) announced on March 8, 2017, that recent severe weather in the western United States is projected to negatively impact first-quarter 2017 earnings by an estimated three to four cents per share. This impact stems from a combination of reduced revenue and increased operating expenses associated with the disruptions. Additionally, the company anticipates incurring approximately $30 million in weather-related capital expenditures. Despite these short-term weather-related costs, Union Pacific reiterated its full-year 2017 capital expenditure plan of approximately $3.1 billion, indicating confidence in its long-term investment strategy. Investors should monitor the company's ability to mitigate these weather-related impacts and manage operational efficiency in the near term, while acknowledging the company's commitment to its ongoing capital investments.
Key Highlights
- 1Weather events on the western network are expected to reduce Q1 2017 earnings by $0.03-$0.04 per share.
- 2Impact is due to a combination of lost revenue and increased operating expenses.
- 3Approximately $30 million in weather-related capital expenditures are anticipated.
- 4The full-year 2017 capital plan of $3.1 billion remains unchanged.
- 5The disclosure was made by the CFO at the Raymond James 38th Annual Institutional Investors Conference.
- 6Forward-looking statements are subject to risks and uncertainties.