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What's in Store for Union Pacific (UNP) in Q1 Earnings?

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Union Pacific Corporation (UNP - Free Report) is scheduled to report first-quarter 2023 results on Apr 20, before market open.

UNP has an impressive earnings surprise history, having outperformed the Zacks Consensus Estimate in three of the preceding four quarters (missed once), the average beat being 1.5%.

Let’s see how things have shaped up for Union Pacific this earnings season.

Union Pacific Corporation Price and EPS Surprise

Union Pacific Corporation Price and EPS Surprise

Union Pacific Corporation price-eps-surprise | Union Pacific Corporation Quote

Q1 Expectations

The Zacks Consensus Estimate for first-quarter 2023 revenues is pegged at $6.13 billion, indicating 4.53% growth year over year. The top line is likely to have been aided by an uptick in freight revenues.

For full-year 2023, management expects operating ratio to improve. Also, capital expenditure is projected to be around $3.6 billion (or less than 15% of revenues). These factors might have aided the bottom-line results. Our estimate for UNP’s first-quarter 2023 earnings is at $2.68 per share, indicating a rise of 4.1% year-over-year.  

On the flip side, escalating operating expenses, primarily due to rising fuel prices might have hurt first-quarter 2023 results.

What Our Model Says

Our proven model does not conclusively predict an earnings beat for Union Pacific this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Union Pacific has an Earnings ESP of -2.20% and a Zacks Rank #3.

Highlights of Q4

Union Pacific’s earnings of $2.67 per share fell short of the Zacks Consensus Estimate of $2.75. However, despite being affected by high costs, the bottom line inched up 0.38% on a year-over-year basis. Operating revenues of $6,180 million also missed the Zacks Consensus Estimate of $6,222.8 million. However, the top line climbed 8% on a year-over-year basis, owing to higher fuel surcharge revenues, volume growth and solid core pricing.

Stocks to Consider

Here are a few stocks from the broader Zacks Transportation sector that investors may consider, as our model shows that these have the right combination of elements to beat on earnings this season.

Canadian National Railway Company (CNI - Free Report) has an Earnings ESP of +1.67% and a Zacks Rank #3. It will release first-quarter 2023 results on Apr 24. You can see the complete list of today’s Zacks #1 Rank stocks here.

The company delivered a trailing four-quarter earnings surprise of 3.5%, on average. The Zacks Consensus Estimate for CNI’s first-quarter 2023 earnings has surged 18.3% year over year.

Kirby Corporation (KEX - Free Report) has an Earnings ESP of +0.52% and carries a Zacks Rank #3. It will release first-quarter 2023 results on Apr 27.

The company delivered a trailing four-quarter earnings surprise of 3.8%, on average. The Zacks Consensus Estimate for KEX’s first-quarter 2023 earnings has improved more than 100% year over year.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.
 


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