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The company also lowered its forecast for 2022 operating ratio, a key profitability metric for railroads, to around 60% from around 58%, in part due to a new tentative labor deal with unions.
Shares of the railroad operator, which connects West Coast ports to key terminals such as Chicago, were down about 3% before the bell.
The railroad industry has come under severe criticism from shippers and the U.S. Surface Transportation Board for cutting staffing levels to the bone in pursuit of a leaner operating model, which has left it struggling to fulfil demand.
Apart from labor shortages, supply-chain snags and port congestion have also disrupted railroad operators’ shipments over the past year.
“Inflationary pressures and operational inefficiencies continued to challenge us,” Union Pacific (NYSE:UNP) Chief Executive Officer Lance Fritz said in a statement.
The company trimmed its forecast for full-year volume growth to about 3% from 4%-5%, even after a 3% rise in the third quarter led by higher coal and renewables shipments.
Adjusted operating ratio for the quarter through September was 58.2%, down 190 basis points.
Quarterly net income rose 13% to about $1.9 billion. Excluding a $114 million charge from the tentative labor deal, the company posted a net income of $3.19 per share, ahead of Refinitiv IBES estimates of $3.06 per share.
Revenue rose 18% to $6.57 billion, helped by higher shipment prices.
