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

Core Insights - Union Pacific Corporation (UNP) reported third-quarter 2024 earnings of $2.75 per share, slightly missing the Zacks Consensus Estimate of $2.76 per share, but showing a year-over-year improvement of 9.6% due to strong operational efficiency and favorable pricing [1] - Operating revenues reached $6.09 billion, falling short of the Zacks Consensus Estimate of $6.19 billion, yet reflecting a 2.5% year-over-year increase driven by core pricing gains and higher volumes [2] - Freight revenues, which constitute 94.7% of total revenues, increased by 4% to $5.77 billion, surpassing the estimate of $5.72 billion, while other revenues decreased by 18% to $323 million [2] Financial Performance - The operating income rose by 11% year over year to $2.4 billion, with total operating expenses declining by 2% to $3.68 billion [2] - Fuel expenses decreased by 13%, and expenses on purchased services and materials fell by 4%, contributing to the overall reduction in operating expenses [2] - The operating ratio improved by 310 basis points year over year to 60.3%, aided by lower quarterly fuel prices which positively impacted the ratio by 120 basis points [3] Segment Performance - Bulk freight revenues amounted to $1.80 billion, a 2% increase year over year, despite a projected decline of 0.3% [4] - Industrial freight revenues totaled $2.12 billion, up 3% year over year, while Premium division freight revenues increased by 7% to $1.84 billion, with Premium revenue carloads improving by 14% year over year [4] Liquidity and Outlook - Union Pacific ended the third quarter of 2024 with cash and cash equivalents of $947 million, down from $1.06 billion at the end of 2023, while debt decreased to $29.76 billion from $31.16 billion [5] - The company anticipates fourth-quarter results to be consistent with the third quarter, with expectations for year-over-year improvement compared to the fourth quarter of 2023 [6] - Management plans to repurchase approximately $1.5 billion in shares in 2024 and forecasts capital expenditures of $3.4 billion for the year [6]