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What's in the Offing for Union Pacific (UNP) in Q2 Earnings?

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Union Pacific Corporation (UNP - Free Report) is scheduled to report second-quarter 2024 results on Jul 25 before market open.

Union Pacific has an impressive earnings surprise history, having surpassed the Zacks Consensus Estimate in three of the trailing four quarters and missing once. The average beat is 2.34%.

Union Pacific Corporation Price and EPS Surprise

Union Pacific Corporation Price and EPS Surprise

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

The Zacks Consensus Estimate for UNP’s soon-to-be reported quarter’s earnings has been revised downward by 1.81% in the past 60 days to $2.71 per share. The Zacks Consensus Estimate for revenues is pegged at $6.07 billion, which indicates growth of 1.8% from the year-ago levels.

The company is grappling with a freight market downturn.Below-par freight rates are hurting Union Pacific's prospects.

Our estimate for freight revenues is pegged at $5.7 billion, which is roughly flat compared with the first-quarter 2024 actuals. Meanwhile, estimates for other revenues are pegged at $364 million, which implies a 12.3% decrease from the first-quarter 2024 reported figure.

To mitigate the revenue decline from the freight downturn, Union Pacific focuses on cost-cutting measures to improve its bottom line in the to be reported period. Our June quarter estimate for adjusted operating expenses indicates a 1.5% decline from the second-quarter 2023 actuals.

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, which is not the case here.

UNP has an Earnings ESP of -0.49% and a Zacks Rank #3 at present. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Highlights of Q1

Union Pacific's first-quarter 2024 earnings of $2.69 per share beat the Zacks Consensus Estimate of $2.50 per share. The bottom line improved 0.75% on a year-over-year basis. Results were aided by strong operational efficiency and favorable pricing.

Operating revenues of $6.03 billion marginally beat the Zacks Consensus Estimate of $6 billion. The top line declined 0.41% on a year-over-year basis. Freight revenues, accounting for 93.2% of the top line, decreased 1% to $5.62 billion.Total operating expenses of $3.66 billion declined 3% year over year.

Stocks to Consider

Here are a few stocks from the broader Zacks Transportation sector that investors might want to consider as our model shows that these have the right combination of elements to beat second-quarter 2024 earnings.

Allegiant (ALGT - Free Report) has an Earnings ESP of +4.11% and a Zacks Rank #3. The company is scheduled to report second-quarter 2024 earnings on Jul 31.

ALGT surpassed the Zacks Consensus Estimate in three of the preceding four quarters and missed once. The average beat is 29.3%.

Kirby (KEX - Free Report) has an Earnings ESP of +7.58% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here. KEX is scheduled to report second-quarter 2024 earnings on Aug 1.

KEX has an impressive earnings surprise history, having surpassed the Zacks Consensus Estimate in each of the preceding four quarters, the average beat being 10.3%.

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


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