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Union Pacific (UNP) Beats on Q2 Earnings, Posts Dim Outlook
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Union Pacific Corporation’s (UNP - Free Report) second-quarter 2020 earnings of $1.67 per share surpassed the Zacks Consensus Estimate of $1.61. However, the bottom line declined 24.8% on a year-over-year basis.
Operating revenues of $4,244 million missed the Zacks Consensus Estimate of $4,399.3 million. The top line also declined 24.2% on a year-over-year basis due to sluggish freight revenues (down 24%). Business volumes, measured by total revenue carloads, declined 20% year over year.
Operating income in the second quarter declined 27% year over year to $1,654 million. Operating expenses contracted 22% to $2,590 million. As a result, operating ratio (operating expenses as a percentage of revenues) deteriorated to 61% from 59.6% in the year-ago quarter due to weak shipments.
Moreover, this Zacks Rank #3 (Hold) company’s second-quarter effective tax rate came in at 24.3% compared with 23.7% in the year-ago quarter. Total capital expenses were$1,599 million in the second 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
Bulk (Grain & grain products, Fertilizer, Food & refrigerated, Coal & renewables) freight revenues were $1,386 million, down 17% year over year. Revenue carloads too slid 15%. Moreover, average revenue per car fell 3% year over year.
Industrial freight revenues totaled $1,500 million, down 23% year over year. Also, revenue carloads fell 18% and average revenue per car fell 6% on a year-over-year basis.
Freight revenues in the Premium division were $1,086 million, down 33% year over year. Moreover, revenue carloads dropped 23% year over year. Moreover, average revenue per car declined 13%.
Meanwhile, other revenues slipped 24% to $272 million in the second quarter.
Liquidity
The company exited the June end quarter with cash and cash equivalents of $2,706 million compared with $831 million at the end of 2019. Debt (due after a year) amounted to $26,439 million at the end of the quarter from $23,943 million at 2019-end. Debt-to-EBITDA ratio (on an adjusted basis) deteriorated to 2.9 from 2.5 at 2019-end.
2020 Outlook
Owing to the COVID-19 led uncertainty looming in the economy, Union Pacific expects its full year 2020 carload volumes to be approximately around 10% compared with 2019 levels.
Sectorial Snapshot
Apart from Union Pacific, let’s take a look into some other Zacks Transportation sector’s second-quarter earnings like Canadian National Railway Company’s (CNI - Free Report) , Kansas City Southern and J.B. Hunt Transport Services (JBHT - Free Report) .
Canadian National second-quarter 2020 earnings (excluding 36 cents from non-recurring items) of 92 cents per share (C$0.77) met the Zacks Consensus Estimate. However, the bottom line declined 28.7% year over year. Quarterly revenues of $2,315 million (C$3,209 million) missed the Zacks Consensus Estimate of $2,407.6 million and declined 21.8% year over year.
J.B. Hunt, carrying a Zacks Rank #3 (Hold), reported second-quarter earnings of $1.14 per share that surpassed the Zacks Consensus Estimate by 31 cents. Total revenues of $2,145.6 million also beat the Zacks Consensus Estimate of $2,060.9 million.
Kansas City Southern’s second-quarter earnings (excluding a penny from non-recurring items) of $1.15 per share beat the Zacks Consensus Estimate of $1.12. This Zacks Rank #3 (Hold) company’s total revenues of $547.9 million lagged the Zacks Consensus Estimate of $550.2 million.
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Union Pacific (UNP) Beats on Q2 Earnings, Posts Dim Outlook
Union Pacific Corporation’s (UNP - Free Report) second-quarter 2020 earnings of $1.67 per share surpassed the Zacks Consensus Estimate of $1.61. However, the bottom line declined 24.8% on a year-over-year basis.
Operating revenues of $4,244 million missed the Zacks Consensus Estimate of $4,399.3 million. The top line also declined 24.2% on a year-over-year basis due to sluggish freight revenues (down 24%). Business volumes, measured by total revenue carloads, declined 20% year over year.
Operating income in the second quarter declined 27% year over year to $1,654 million. Operating expenses contracted 22% to $2,590 million. As a result, operating ratio (operating expenses as a percentage of revenues) deteriorated to 61% from 59.6% in the year-ago quarter due to weak shipments.
Moreover, this Zacks Rank #3 (Hold) company’s second-quarter effective tax rate came in at 24.3% compared with 23.7% in the year-ago quarter. Total capital expenses were$1,599 million in the second 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 $1,386 million, down 17% year over year. Revenue carloads too slid 15%. Moreover, average revenue per car fell 3% year over year.
Industrial freight revenues totaled $1,500 million, down 23% year over year. Also, revenue carloads fell 18% and average revenue per car fell 6% on a year-over-year basis.
Freight revenues in the Premium division were $1,086 million, down 33% year over year. Moreover, revenue carloads dropped 23% year over year. Moreover, average revenue per car declined 13%.
Meanwhile, other revenues slipped 24% to $272 million in the second quarter.
Liquidity
The company exited the June end quarter with cash and cash equivalents of $2,706 million compared with $831 million at the end of 2019. Debt (due after a year) amounted to $26,439 million at the end of the quarter from $23,943 million at 2019-end. Debt-to-EBITDA ratio (on an adjusted basis) deteriorated to 2.9 from 2.5 at 2019-end.
2020 Outlook
Owing to the COVID-19 led uncertainty looming in the economy, Union Pacific expects its full year 2020 carload volumes to be approximately around 10% compared with 2019 levels.
Sectorial Snapshot
Apart from Union Pacific, let’s take a look into some other Zacks Transportation sector’s second-quarter earnings like Canadian National Railway Company’s (CNI - Free Report) , Kansas City Southern and J.B. Hunt Transport Services (JBHT - Free Report) .
Canadian National second-quarter 2020 earnings (excluding 36 cents from non-recurring items) of 92 cents per share (C$0.77) met the Zacks Consensus Estimate. However, the bottom line declined 28.7% year over year. Quarterly revenues of $2,315 million (C$3,209 million) missed the Zacks Consensus Estimate of $2,407.6 million and declined 21.8% year over year.
J.B. Hunt, carrying a Zacks Rank #3 (Hold), reported second-quarter earnings of $1.14 per share that surpassed the Zacks Consensus Estimate by 31 cents. Total revenues of $2,145.6 million also beat the Zacks Consensus Estimate of $2,060.9 million.
Kansas City Southern’s second-quarter earnings (excluding a penny from non-recurring items) of $1.15 per share beat the Zacks Consensus Estimate of $1.12. This Zacks Rank #3 (Hold) company’s total revenues of $547.9 million lagged the Zacks Consensus Estimate of $550.2 million.
The Hottest Tech Mega-Trend of All
Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>