Advertisement
YOU ARE HERE: LAT HomeCollections

EARNINGS

Special Charge Blamed as Union Pacific Has Loss

July 24, 1986

Union Pacific lost $835 million in the second quarter, owing to a previously announced $945-million after-tax charge on discontinued operations, a writedown on certain asset values and reductions in its work force and facilities.

The New York-based transportation and resource firm posted revenue of $1.6 billion, down from $1.96 billion in the second quarter of last year, when the firm earned $132.2 million.

Union Pacific said it earned $110 million before the special charge, which amounted to $1.7 billion before taxes.

The decline in operating results reflected sharply lower profits at the firm's petroleum unit. Champlin Petroleum earned $6 million, down from $41 million last year. Exploration and production income declined $51 million to $13 million. Manufacturing and marketing income was $29 million, down from $38 million.

Despite a 1% decline in revenue, the firm's Union Pacific Railroad unit posted record quarterly earnings of $98 million.

Union Pacific Chairman William S. Cook said the firm's performance in the last half of 1986 would be "influenced by the strength of the economy and the trend of energy prices."

Cook said the firm would begin to see the benefits of the $1.7-billion charge quickly. When the restructuring is fully implemented over a three-year period, it will reduce after-tax expenses by $150 million to $200 million, he said. Two-thirds of that money would represent improved cash flow, he said.

Advertisement
Los Angeles Times Articles
|
|
|