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Union Pacific (UNP) Q1 Earnings Beat Estimates, Q2 View Dim
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Union Pacific Corporation’s (UNP - Free Report) first-quarter 2020 earnings of $2.15 per share surpassed the Zacks Consensus Estimate of $1.86. Operating revenues of $5,229 million also beat the Zacks Consensus Estimate of $5,105.9 million. Following this better-than-expected performance despite the economic uncertainty caused by coronavirus, shares of the company were up in early trading.
While the bottom line improved 11.4% on a year-over-year basis, primarily due to low costs, the top line declined 3% year over year due to sluggish freight revenues (down 3%). Business volumes, measured by total revenue carloads, declined 7%.
Operating income in the first quarter increased 9% year over year to $2,143 million. Operating expenses contracted 10% to $3,086 million. As a result, operating ratio (operating expenses as a percentage of revenues) improved to 59% from 63.6% a year ago, driven by efforts to control costs to offset weak shipments.
Moreover, this Zacks Rank #4 (Sell) company bought back 14.3 million sharesworth $2.6 billion in the first quarter. First-quarter effective tax rate came in at 23.1% compared with 22.3% a year ago. Total capital expenses were$807 million in the first quarter.
Bulk (Grain & grain products, Fertilizer, Food & refrigerated, Coal & renewables) freight revenues were $1,534 million, down 5% year over year. Revenue carloads too slid 7%. However, average revenue per car increased 2% year over year.
Industrial freight revenues totaled $1,894 million, up 3% year over year. While revenue carloads rose 3%, average revenue per car was flat year over year.
Freight revenues in the Premium division were $1,452 million, down 6% year over year. Moreover, revenue carloads dropped 12% year over year. However, average revenue per car increased 6%.
Meanwhile, other revenues slipped 7% to $349 million in the first quarter.
Liquidity
The company exited the quarter with cash and cash equivalents of $1,130 million compared with $831 million at the end of 2019. Debt (due after a year) mounted to $26,365 million at the end of the quarter from $23,943 million at 2019-end. Debt-to-EBITDA ratio (on an adjusted basis) deteriorated to 2.7 from 2.5 at 2019-end.
Q2 Outlook
Union Pacific expects carload volumes to plunge approximately 25% year over year in the second quarter due to freight softness as a result of coronavirus.
Upcoming Releases
Investors interested in the broader Transportation sector are keenly awaiting first-quarter earnings reports from key players like Canadian National Railway Company (CNI - Free Report) , Norfolk Southern Corporation (NSC - Free Report) and Southwest Airlines Co. (LUV - Free Report) . While Canadian National and Southwest Airlines will release earnings numbers on Apr 27 and Apr 28, respectively, Norfolk Southern will announce the same on Apr 29.
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A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft in the 1990s. Zacks’ just-released special report reveals 8 stocks to watch. The report is only available for a limited time.
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Union Pacific (UNP) Q1 Earnings Beat Estimates, Q2 View Dim
Union Pacific Corporation’s (UNP - Free Report) first-quarter 2020 earnings of $2.15 per share surpassed the Zacks Consensus Estimate of $1.86. Operating revenues of $5,229 million also beat the Zacks Consensus Estimate of $5,105.9 million. Following this better-than-expected performance despite the economic uncertainty caused by coronavirus, shares of the company were up in early trading.
While the bottom line improved 11.4% on a year-over-year basis, primarily due to low costs, the top line declined 3% year over year due to sluggish freight revenues (down 3%). Business volumes, measured by total revenue carloads, declined 7%.
Operating income in the first quarter increased 9% year over year to $2,143 million. Operating expenses contracted 10% to $3,086 million. As a result, operating ratio (operating expenses as a percentage of revenues) improved to 59% from 63.6% a year ago, driven by efforts to control costs to offset weak shipments.
Moreover, this Zacks Rank #4 (Sell) company bought back 14.3 million sharesworth $2.6 billion in the first quarter. First-quarter effective tax rate came in at 23.1% compared with 22.3% a year ago. Total capital expenses were$807 million in the first quarter.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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 $1,534 million, down 5% year over year. Revenue carloads too slid 7%. However, average revenue per car increased 2% year over year.
Industrial freight revenues totaled $1,894 million, up 3% year over year. While revenue carloads rose 3%, average revenue per car was flat year over year.
Freight revenues in the Premium division were $1,452 million, down 6% year over year. Moreover, revenue carloads dropped 12% year over year. However, average revenue per car increased 6%.
Meanwhile, other revenues slipped 7% to $349 million in the first quarter.
Liquidity
The company exited the quarter with cash and cash equivalents of $1,130 million compared with $831 million at the end of 2019. Debt (due after a year) mounted to $26,365 million at the end of the quarter from $23,943 million at 2019-end. Debt-to-EBITDA ratio (on an adjusted basis) deteriorated to 2.7 from 2.5 at 2019-end.
Q2 Outlook
Union Pacific expects carload volumes to plunge approximately 25% year over year in the second quarter due to freight softness as a result of coronavirus.
Upcoming Releases
Investors interested in the broader Transportation sector are keenly awaiting first-quarter earnings reports from key players like Canadian National Railway Company (CNI - Free Report) , Norfolk Southern Corporation (NSC - Free Report) and Southwest Airlines Co. (LUV - Free Report) . While Canadian National and Southwest Airlines will release earnings numbers on Apr 27 and Apr 28, respectively, Norfolk Southern will announce the same on Apr 29.
Biggest Tech Breakthrough in a Generation
Be among the early investors in the new type of device that experts say could impact society as much as the discovery of electricity. Current technology will soon be outdated and replaced by these new devices. In the process, it’s expected to create 22 million jobs and generate $12.3 trillion in activity.
A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft in the 1990s. Zacks’ just-released special report reveals 8 stocks to watch. The report is only available for a limited time.
See 8 breakthrough stocks now>>