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Union Pacific (UNP) Q2 Earnings Beat Estimates, Sales Lag
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Union Pacific Corporation’s (UNP - Free Report) second-quarter 2024 earnings of $2.74 per share beat the Zacks Consensus Estimate of $2.70 per share. The bottom line improved 6.61% on a year-over-year basis. Results were aided by strong operational efficiency and favorable pricing.
Operating revenues of $6 billion marginally missed the Zacks Consensus Estimate of $6.06 billion. The top line improved by 0.74% on a year-over-year basis due to core pricing gains and business mix, offset by reduced fuel surcharge revenues.
Freight revenues, accounting for 94% of the top line, increased 1% to $5.64 billion. The actual figure was less than our estimate of $5.75 billion. Other revenues decreased 6% to $369 million in the second quarter of 2024. Business volumes, measured by total revenue carloads, were flat year over year.
Operating income was up 9% year over year at $2.4 billion.
Total operating expenses of $3.6 billion declined 4% year over year. Fuel expenses plunged 6%. Expenses on compensation and benefits fell by 6% year over year.
Expenses on purchased services and materials fell marginally by 1%, and other cost items declined 4% year over year.
The operating ratio (operating expenses as a percentage of revenues) improved by 300 basis points year over year to 60%.
Union Pacific Corporation Price, Consensus and EPS Surprise
Bulk (Grain & grain products, Fertilizer, Food & refrigerated, Coal & renewables) freight revenues were $1.72 billion, which declined 2% on a year-over-year basis. However, we projected the metric to fall 0.4% from the year-ago levels. Segmental revenue carloads declined 5% year over year.
Industrial freight revenues totaled $2.12 billion, up 2% year over year. Segmental revenue carloads fell by 3% year over year.
Freight revenues in the Premium division were $1.79 billion, up 4% year over year. However, we expected the metric to increase 4.6% compared with a year ago reported figure. Premium revenue carloads improved 6% year over year.
Liquidity
Union Pacific exited the second quarter of 2024 with cash and cash equivalents of $1.14 billion compared with $1.06 billion in the same time period in 2023. Debt (due after a year) increased to $31.17 billion at the June-end quarter from $31.16 billion at 2023-end.
The company continues to expect current-year profitability to gain momentum due to a strong service product, improved network efficiency and solid pricing.
Management expects to repurchase shares of roughly $1.5 billion in 2024.
UNP remains uncertain about the second half of 2024 volume outlook based on economic indicators and coal demand. Management continues to anticipate capital expenditure of $3.4 billion for the full year.
Q2 Performances of Some Other Transportation Companies
Delta Air Lines’ (DAL - Free Report) second-quarter 2024 earnings (excluding 35 cents from non-recurring items) of $2.36 per share missed the Zacks Consensus Estimate of $2.37 and decreased 12% year over year.
Revenues of $16.7billion surpassed the Zacks Consensus Estimate of $16.3 billion and increased 7% on a year-over-year basis. Passenger revenues, accounting for 83% of the total revenues, improved 5% year over year.
United Airlines (UAL - Free Report) reported second-quarter 2024 earnings (excluding 18 cents from non-recurring items) of $4.14 per share, which surpassed the Zacks Consensus Estimate of $3.97 per share. However, the bottom line decreased 17.69% year over year.
Operating revenues of $15 billion missed the Zacks Consensus Estimate of $15.13 billion. However, the top line increased 5.7% year over year due to upbeat air travel demand. Cargo revenues rose by 14.4% year over year to $414 million. Revenues from other sources jumped 9.6% year over year to $892 million.
J.B. Hunt Transport Services’ (JBHT - Free Report) second-quarter 2024 earnings per share of $1.32 missed the Zacks Consensus Estimate of $1.51 and declined 27.1% year over year.
Total operating revenues of $2.93 billion lagged the Zacks Consensus Estimate of $3.04 billion and fell 6.5% year over year. Total operating revenues, excluding fuel surcharge revenues, decreased approximately 6% year over year.
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Union Pacific (UNP) Q2 Earnings Beat Estimates, Sales Lag
Union Pacific Corporation’s (UNP - Free Report) second-quarter 2024 earnings of $2.74 per share beat the Zacks Consensus Estimate of $2.70 per share. The bottom line improved 6.61% on a year-over-year basis. Results were aided by strong operational efficiency and favorable pricing.
Operating revenues of $6 billion marginally missed the Zacks Consensus Estimate of $6.06 billion. The top line improved by 0.74% on a year-over-year basis due to core pricing gains and business mix, offset by reduced fuel surcharge revenues.
Freight revenues, accounting for 94% of the top line, increased 1% to $5.64 billion. The actual figure was less than our estimate of $5.75 billion. Other revenues decreased 6% to $369 million in the second quarter of 2024. Business volumes, measured by total revenue carloads, were flat year over year.
Operating income was up 9% year over year at $2.4 billion.
Total operating expenses of $3.6 billion declined 4% year over year. Fuel expenses plunged 6%. Expenses on compensation and benefits fell by 6% year over year.
Expenses on purchased services and materials fell marginally by 1%, and other cost items declined 4% year over year.
The operating ratio (operating expenses as a percentage of revenues) improved by 300 basis points year over year to 60%.
Union Pacific Corporation Price, Consensus and EPS Surprise
Union Pacific Corporation price-consensus-eps-surprise-chart | Union Pacific Corporation Quote
Segmental Performance
Bulk (Grain & grain products, Fertilizer, Food & refrigerated, Coal & renewables) freight revenues were $1.72 billion, which declined 2% on a year-over-year basis. However, we projected the metric to fall 0.4% from the year-ago levels. Segmental revenue carloads declined 5% year over year.
Industrial freight revenues totaled $2.12 billion, up 2% year over year. Segmental revenue carloads fell by 3% year over year.
Freight revenues in the Premium division were $1.79 billion, up 4% year over year. However, we expected the metric to increase 4.6% compared with a year ago reported figure. Premium revenue carloads improved 6% year over year.
Liquidity
Union Pacific exited the second quarter of 2024 with cash and cash equivalents of $1.14 billion compared with $1.06 billion in the same time period in 2023. Debt (due after a year) increased to $31.17 billion at the June-end quarter from $31.16 billion at 2023-end.
Currently, Union Pacific carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
2024 Outlook
The company continues to expect current-year profitability to gain momentum due to a strong service product, improved network efficiency and solid pricing.
Management expects to repurchase shares of roughly $1.5 billion in 2024.
UNP remains uncertain about the second half of 2024 volume outlook based on economic indicators and coal demand. Management continues to anticipate capital expenditure of $3.4 billion for the full year.
Q2 Performances of Some Other Transportation Companies
Delta Air Lines’ (DAL - Free Report) second-quarter 2024 earnings (excluding 35 cents from non-recurring items) of $2.36 per share missed the Zacks Consensus Estimate of $2.37 and decreased 12% year over year.
Revenues of $16.7billion surpassed the Zacks Consensus Estimate of $16.3 billion and increased 7% on a year-over-year basis. Passenger revenues, accounting for 83% of the total revenues, improved 5% year over year.
United Airlines (UAL - Free Report) reported second-quarter 2024 earnings (excluding 18 cents from non-recurring items) of $4.14 per share, which surpassed the Zacks Consensus Estimate of $3.97 per share. However, the bottom line decreased 17.69% year over year.
Operating revenues of $15 billion missed the Zacks Consensus Estimate of $15.13 billion. However, the top line increased 5.7% year over year due to upbeat air travel demand. Cargo revenues rose by 14.4% year over year to $414 million. Revenues from other sources jumped 9.6% year over year to $892 million.
J.B. Hunt Transport Services’ (JBHT - Free Report) second-quarter 2024 earnings per share of $1.32 missed the Zacks Consensus Estimate of $1.51 and declined 27.1% year over year.
Total operating revenues of $2.93 billion lagged the Zacks Consensus Estimate of $3.04 billion and fell 6.5% year over year. Total operating revenues, excluding fuel surcharge revenues, decreased approximately 6% year over year.