Shares of Union Pacific Corp. UNP shot up 8.8% toward an 11-month high in premarket trading Wednesday, after the railroad operator reported a second-quarter revenue miss amid softening consumer markets and higher labor costs, but said Chief Executive Lance Fritz is stepping down after more than eight years in the role. The company named Jim Vena as its new CEO, effective Aug. 14. Vena is returning to the railroad operator after serving as chief operation officer from 2019 to 2020. The company reported net income that fell to $1.57 billion, or $2.57 a share, from $1.84 billion, or $2.93 a share, in the year-ago period. The FactSet consensus for earnings per share was $2.74. Revenue declined 4.7% to $5.57 billion, due to lower volumes and reduced fuel surcharges, to fall below the FactSet consensus of $6.09 billion. “The results this quarter were impacted by softening consumer markets, inflation, a one-time labor expense, and increased workforce levels,” current CEO Fritz said. The 2023 outlook is pressured by a challenging demand and cost environment, with volume expected to be below current forecasts for industrial production of a 0.1% increase. The stock has gained 4.1% year to date through Tuesday while the S&P 500 SPX has advanced 19.0%.
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