(Reuters) -Union Pacific reported a 19% fall in quarterly profit on Thursday, as higher labor costs and lower volumes outweighed the benefits from price hikes implemented by the railroad operator.
Inflationary pressures and higher borrowing costs have reduced consumer demand for goods, driving down freight volumes hauled by rail, while labor costs for the company jumped on increased hiring in the year after the railroad industry faced criticism for inadequate services.
"We faced many challenges in the quarter, including continued inflationary pressures and a drop in carloads," said Chief Executive Officer Jim Vena.
The company's operating ratio, a key metric that indicates operating expenses as a percentage of revenue, rose to 63.4% in the third quarter from 59.9% reported a year ago. The ratio has risen over the last six quarters.
Union Pacific, which connects 23 states in the western two-thirds of the country by rail, also posted a 10% decline in quarterly operating revenue to $5.94 billion.
Its net income fell to $1.53 billion in the third quarter, compared with about $1.90 billion a year earlier.
(Reporting by Ananta Agarwal and Amna Karimi in Bengaluru; Editing by Shilpi Majumdar)
