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Union Pacific's Third-Quarter Earnings & Revenues Miss Estimates

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Union Pacific Corporation’s (UNP - Free Report) third-quarter 2024 earnings of $2.75 per share marginally missed the Zacks Consensus Estimate of $2.76 per share. However, the bottom line improved 9.6% on a year-over-year basis. The year-over-year improvement was due to strong operational efficiency and favorable pricing.

Find the latest EPS estimates and surprises on Zacks Earnings Calendar.

Operating revenues of $6.09 billion lagged the Zacks Consensus Estimate of $6.19 billion. However, the top line improved by 2.5% on a year-over-year basis due to core pricing gains and higher volumes.

Freight revenues, accounting for 94.7% of the top line, increased 4% to $5.77 billion. The actual figure surpassed our estimate of $5.72 billion. Other revenues decreased 18% to $323 million in the third quarter of 2024. Business volumes, measured by total revenue carloads, increased by 6% year over year.

The operating income was up 11% year over year at $2.4 billion.

Total operating expenses of $3.68 billion declined 2% year over year. Fuel expenses plunged 13%. Expenses on purchased services and materials fell by 4%, and other cost items declined 6% year over year.

The operating ratio (operating expenses as a percentage of revenues) improved by 310 basis points year over year to 60.3%. Lower quarterly fuel prices positively impacted the operating ratio by 120 basis points.

Union Pacific Corporation Price, Consensus and EPS Surprise

Union Pacific Corporation Price, Consensus and EPS Surprise

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

UNP’s Segmental Highlights

Bulk (Grain & grain products, Fertilizer, Food & refrigerated, Coal & renewables) freight revenues were $1.80 billion, which increased 2% on a year-over-year basis. However, we had projected the metric to fall 0.3% from the year-ago levels. Segmental revenue carloads declined 3% year over year.

Industrial freight revenues totaled $2.12 billion, up 3% year over year. Segmental revenue carloads fell by 2% year over year.

Freight revenues in the Premium division were $1.84 billion, up 7% year over year. However, we had expected the metric to increase 6.6% compared with the year-ago reported figure. Premium revenue carloads improved 14% year over year.

UNP’s Liquidity

Union Pacific exited the third quarter of 2024 with cash and cash equivalents of $947 million compared with $1.06 billion in the fourth quarter of 2023. Debt (due after a year) decreased to $29.76 billion in the September-end quarter from $31.16 billion at 2023’s 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.

UNP’s Outlook

Union Pacific now expects fourth-quarter results to be consistent sequentially from the third quarter while improving year over year versus the fourth quarter of 2023.

The company continues to remain optimistic about current-year profitability, expecting it to gain momentum due to a robust service product, enhanced network efficiency and stable pricing.

Management also plans to repurchase approximately $1.5 billion in shares in 2024 and anticipates capital expenditures of $3.4 billion for the entire year.

Q3 Performances of Other Transportation Companies

Delta Air Lines (DAL - Free Report) reported third-quarter 2024 earnings (excluding 47 cents from non-recurring items) of $1.50 per share, which fell short of the Zacks Consensus Estimate of $1.56. Earnings decreased 26.11% on a year-over-year basis due to high labor costs.

Revenues of $15.68 billion surpassed the Zacks Consensus Estimate of $15.37 billion and increased 1.2% on a year-over-year basis, driven by strong air travel demand. Adjusted operating revenues (excluding third-party refinery sales) totaled $14.59 billion, flat year over year. This included the $380 million impact of the outage caused by CrowdStrike (CRWD - Free Report) .

Norfolk Southern Corporation’s (NSC - Free Report) third-quarter 2024 earnings (excluding $1.6 from non-recurring items) of $3.25 per share beat the Zacks Consensus Estimate of $3.10 and increased 22.6% year over year due to lower costs.

Railway operating revenues were $3.05 billion in the quarter under review, lagging the Zacks Consensus Estimate of $3.09 billion. The top line increased 2.7% year over year, with the Merchandise and Intermodal segments registering an improvement in revenues.

J.B. Hunt Transport Services’ (JBHT - Free Report) third-quarter 2024 earnings of $1.49 per share outpaced the Zacks Consensus Estimate of $1.42 but declined 17.2% year over year.

Total operating revenues of $3.07 billion surpassed the Zacks Consensus Estimate of $3.04 billion but fell 3% year over year. The operating income for the September quarter decreased 7% year over year to $224.1 million.

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