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Why Is Union Pacific (UNP) Down 2.6% Since the Last Earnings Report?
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It has been about a month since the last earnings report for Union Pacific Corporation (UNP - Free Report) . Shares have lost about 2.6% in that time frame, underperforming the market.
Will the recent negative trend continue leading up to the stock's next earnings release, or is it due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Union Pacific Corporation Up on Q1 Earnings Beat
Union Pacific Corporation's first quarter 2017 earnings of $1.32 beat the Zacks Consensus Estimate of $1.23 per share. The bottom-line expanded 13.8% on a year-over-year basis.
Operating revenues of $5,132 million beat the Zacks Consensus Estimate of $4,997.7 million. Revenues increased 6.3% on a year over year basis. Freight revenues increased 6%, thereby boosting the top line. Freight revenues increased due to volume growth, increased fuel surcharge revenues among other factors.
Operating income in the first quarter climbed 6% year over year to $1.8 billion. Operating ratio (defined as operating expenses as a percentage of revenues) came in at 65.1%, flat year-over-year.
Segment Details
Agricultural Products freight revenues were $942 million, up 7% year over year. Business volumes increased 6% year over year, while average revenue per car climbed 1%.
Automotive accounted for $504 million of freight revenues, down 1% year over year. Business volumes were down 2% and average revenue per car climbed 1% year over year.
Chemicals contributed $885 million to freight revenues, up 1% year over year. Volumes were down 4%, while average revenue per car improved 5%.
Coal revenues (freight) increased 25% year over year to $648 million. Volumes grew 16% and average revenue per car improved 8% year over year.
Industrial Products generated freight revenues of $907 million, up 9% year over year on an 1% volume growth. Average revenue per car was up 7%.
Intermodal segment freight revenues came in at $908 million, up 3% year over year. Volumes were flat while average revenue per car improved 3%.
Other revenues improved 3% to $338 million in the first quarter of 2017.
Liquidity
Union Pacific exited the quarter with cash and cash equivalents of $1,049 million, compared with $1,277 million at the end of 2016. Debt (due after 1 year) came in at $14, 310 million at the end of the quarter compared with $14,249 million at the end of 2016. Adjusted debt-to-capitalization ratio increased to 47.4% from 47.3% at 2016-end.
How Have Estimates Been Moving Since Then?
Following the release, investors have witnessed an upward trend for fresh estimates. There have been two revisions higher for the current quarter. While looking back an additional 30 days, we can see even more upward momentum. There have been seven moves up in the last two months.
At this time, Union Pacific's stock has a nice Growth Score of 'B', while it is lagging a lot on the momentum front with 'F'. However, the stock was allocated a grade of 'C' on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'B'. If you aren't focused on one strategy, this score is the one you should be interested in.
Based on our scores, the stock is more suitable for growth investors than value investors.
Outlook
While estimates have been broadly trending upward for the stock, the magnitude of these revisions has been net zero. Notably, the stock has a Zacks Rank #2 (Buy). We are expecting an above average return from the stock in the next few months.
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Why Is Union Pacific (UNP) Down 2.6% Since the Last Earnings Report?
It has been about a month since the last earnings report for Union Pacific Corporation (UNP - Free Report) . Shares have lost about 2.6% in that time frame, underperforming the market.
Will the recent negative trend continue leading up to the stock's next earnings release, or is it due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Union Pacific Corporation Up on Q1 Earnings Beat
Union Pacific Corporation's first quarter 2017 earnings of $1.32 beat the Zacks Consensus Estimate of $1.23 per share. The bottom-line expanded 13.8% on a year-over-year basis.
Operating revenues of $5,132 million beat the Zacks Consensus Estimate of $4,997.7 million. Revenues increased 6.3% on a year over year basis. Freight revenues increased 6%, thereby boosting the top line. Freight revenues increased due to volume growth, increased fuel surcharge revenues among other factors.
Operating income in the first quarter climbed 6% year over year to $1.8 billion. Operating ratio (defined as operating expenses as a percentage of revenues) came in at 65.1%, flat year-over-year.
Segment Details
Agricultural Products freight revenues were $942 million, up 7% year over year. Business volumes increased 6% year over year, while average revenue per car climbed 1%.
Automotive accounted for $504 million of freight revenues, down 1% year over year. Business volumes were down 2% and average revenue per car climbed 1% year over year.
Chemicals contributed $885 million to freight revenues, up 1% year over year. Volumes were down 4%, while average revenue per car improved 5%.
Coal revenues (freight) increased 25% year over year to $648 million. Volumes grew 16% and average revenue per car improved 8% year over year.
Industrial Products generated freight revenues of $907 million, up 9% year over year on an 1% volume growth. Average revenue per car was up 7%.
Intermodal segment freight revenues came in at $908 million, up 3% year over year. Volumes were flat while average revenue per car improved 3%.
Other revenues improved 3% to $338 million in the first quarter of 2017.
Liquidity
Union Pacific exited the quarter with cash and cash equivalents of $1,049 million, compared with $1,277 million at the end of 2016. Debt (due after 1 year) came in at $14, 310 million at the end of the quarter compared with $14,249 million at the end of 2016. Adjusted debt-to-capitalization ratio increased to 47.4% from 47.3% at 2016-end.
How Have Estimates Been Moving Since Then?
Following the release, investors have witnessed an upward trend for fresh estimates. There have been two revisions higher for the current quarter. While looking back an additional 30 days, we can see even more upward momentum. There have been seven moves up in the last two months.
Union Pacific Corporation Price and Consensus
Union Pacific Corporation Price and Consensus | Union Pacific Corporation Quote
VGM Scores
At this time, Union Pacific's stock has a nice Growth Score of 'B', while it is lagging a lot on the momentum front with 'F'. However, the stock was allocated a grade of 'C' on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'B'. If you aren't focused on one strategy, this score is the one you should be interested in.
Based on our scores, the stock is more suitable for growth investors than value investors.
Outlook
While estimates have been broadly trending upward for the stock, the magnitude of these revisions has been net zero. Notably, the stock has a Zacks Rank #2 (Buy). We are expecting an above average return from the stock in the next few months.