Workflow
Union Pacific's Third-Quarter Earnings & Revenues Miss Estimates
UNPUnion Pacific(UNP) ZACKS·2024-10-24 17:15

Core Insights - Union Pacific Corporation (UNP) reported third-quarter 2024 earnings of 2.75pershare,slightlymissingtheZacksConsensusEstimateof2.75 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 6.09billion,fallingshortoftheZacksConsensusEstimateof6.09 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 5.77billion,surpassingtheestimateof5.77 billion, surpassing the estimate of 5.72 billion, while other revenues decreased by 18% to 323million[2]FinancialPerformance−Theoperatingincomeroseby11323 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 3.68billion[2]−Fuelexpensesdecreasedby133.68 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 2.12billion,up32.12 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 947million,downfrom947 million, down from 1.06 billion at the end of 2023, while debt decreased to 29.76billionfrom29.76 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 1.5billioninsharesin2024andforecastscapitalexpendituresof1.5 billion in shares in 2024 and forecasts capital expenditures of 3.4 billion for the year [6]