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Union Pacific (UNP) Q2 Earnings Surpass Estimates, Up Y/Y
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Union Pacific Corporation’s (UNP - Free Report) second-quarter 2018 earnings of $1.98 per share surpassed the Zacks Consensus Estimate by 4 cents. The bottom line also expanded 36.6% on a year-over-year basis. Results were aided by higher revenues.
Operating revenues came in at $5,672 million, which outpaced the Zacks Consensus Estimate of $5,603.6 million. The figure also increased 8% year over year. Higher freight revenues (up 8%) boosted the top-line performance. The uptick was driven by volume growth and increased fuel surcharge revenues among other factors. Bulk of revenues (93.7%) at Union Pacific was derived from freight in the reported quarter.
Operating income in the second quarter rose 5% year over year to $2,099 million. Adjusted operating ratio (defined as operating expenses as a percentage of revenues) came in at 63% compared with 61.9% a year ago.
During the quarter under review, Union Pacific bought back 33.2 million shares, inclusive of 19.9 million shares received under an accelerated share repurchase scheme.
Segment Details
Agricultural Products freight revenues were $1,114 million, up 5% year over year. Revenue carloads decreased 1% year over year. However, average revenue per car increased 6%.
Freight revenues at the Energy division were $1,111 million, up 5% year over year. Revenue carloads decreased 1% year over year. Average revenue per car increased 6%.
Industrial freight revenues totalled $1,437 million, up 8% year over year. Revenue carloads increased 6% year over year. Also, average revenue per car was up 2%.
Freight revenues at the Premium division were $1,655 million, up 14% year over year. Revenue carloads increased 6%year over year. Average revenue per car increased 8%.
Other revenues improved 3% to $353 million in the second quarter of 2018.
Union Pacific Corporation Price, Consensus and EPS Surprise
Union Pacific exited the second quarter with cash and cash equivalents of $1,604 million compared with $1,275 million at the end of 2017. Debt (due after one year) came in at $21,357 million at the end of the quarter compared with $16,144 million at the end of 2017. Debt-to- EBITDA ratio (on an adjusted basis) increased to 2.4 from 1.9 at 2017 end.
Upcoming Releases
Investors interested in the Zacks Rail industry are awaiting second-quarter earnings reports from railroad companies like Canadian National Railway Company (CNI - Free Report) , Norfolk Southern Corporation (NSC - Free Report) and Genesee & Wyoming Inc. . Canadian National Railway Company will release results on Jul 24. Norfolk Southern and Genesee & Wyoming will announce the same on Jul 25 and Jul 27, respectively.
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Union Pacific (UNP) Q2 Earnings Surpass Estimates, Up Y/Y
Union Pacific Corporation’s (UNP - Free Report) second-quarter 2018 earnings of $1.98 per share surpassed the Zacks Consensus Estimate by 4 cents. The bottom line also expanded 36.6% on a year-over-year basis. Results were aided by higher revenues.
Operating revenues came in at $5,672 million, which outpaced the Zacks Consensus Estimate of $5,603.6 million. The figure also increased 8% year over year. Higher freight revenues (up 8%) boosted the top-line performance. The uptick was driven by volume growth and increased fuel surcharge revenues among other factors. Bulk of revenues (93.7%) at Union Pacific was derived from freight in the reported quarter.
Operating income in the second quarter rose 5% year over year to $2,099 million. Adjusted operating ratio (defined as operating expenses as a percentage of revenues) came in at 63% compared with 61.9% a year ago.
During the quarter under review, Union Pacific bought back 33.2 million shares, inclusive of 19.9 million shares received under an accelerated share repurchase scheme.
Segment Details
Agricultural Products freight revenues were $1,114 million, up 5% year over year. Revenue carloads decreased 1% year over year. However, average revenue per car increased 6%.
Freight revenues at the Energy division were $1,111 million, up 5% year over year. Revenue carloads decreased 1% year over year. Average revenue per car increased 6%.
Industrial freight revenues totalled $1,437 million, up 8% year over year. Revenue carloads increased 6% year over year. Also, average revenue per car was up 2%.
Freight revenues at the Premium division were $1,655 million, up 14% year over year. Revenue carloads increased 6%year over year. Average revenue per car increased 8%.
Other revenues improved 3% to $353 million in the second quarter of 2018.
Union Pacific Corporation Price, Consensus and EPS Surprise
Union Pacific Corporation Price, Consensus and EPS Surprise | Union Pacific Corporation Quote
Liquidity
Union Pacific exited the second quarter with cash and cash equivalents of $1,604 million compared with $1,275 million at the end of 2017. Debt (due after one year) came in at $21,357 million at the end of the quarter compared with $16,144 million at the end of 2017. Debt-to- EBITDA ratio (on an adjusted basis) increased to 2.4 from 1.9 at 2017 end.
Upcoming Releases
Investors interested in the Zacks Rail industry are awaiting second-quarter earnings reports from railroad companies like Canadian National Railway Company (CNI - Free Report) , Norfolk Southern Corporation (NSC - Free Report) and Genesee & Wyoming Inc. . Canadian National Railway Company will release results on Jul 24. Norfolk Southern and Genesee & Wyoming will announce the same on Jul 25 and Jul 27, respectively.
Zacks Rank
Union Pacific carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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It's hard to believe, even for us at Zacks. But while the market gained +21.9% in 2017, our top stock-picking screens have returned +115.0%, +109.3%, +104.9%, +98.6%, and +67.1%.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - 2017, the composite yearly average gain for these strategies has beaten the market more than 19X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
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