Union Pacific Corporation (UNP - Free Report) reported better-than-expected third-quarter 2021 results.
Earnings of $2.57 per share surpassed the Zacks Consensus Estimate of $2.48. Moreover, the bottom line rallied 27.9% on a year-over-year basis.
Operating revenues of $5,566 million also beat the Zacks Consensus Estimate of $5,381.7 million. The top line increased 13.2% on a year-over-year basis due to an uptick in freight revenues (up 12% to $5,166 million). Business volumes, measured by total revenue carloads, were flat compared with third-quarter 2020 levels.
Operating income in the third quarter surged 20% year over year to $2,432 million. Total operating expenses escalated 9% to $3,134 million. Operating ratio (operating expenses, as a percentage of revenues) improved to 56.3% compared with 58.7% in the year-ago quarter, despite being hurt to the tune of 140 basis points by higher fuel prices. Notably, lower the value of the metric, the better.
This currently Zacks Rank #3 (Hold) company’s third-quarter effective tax rate rose to 23.3% from 23.1% in the year-ago quarter. In the third quarter, Union Pacific repurchased 8.6 million shares at an aggregate cost of $1.8 billion. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Segmental Performance
Bulk (Grain & grain products, Fertilizer, Food & refrigerated, Coal & renewables) freight revenues were $1,687 million, up 14% year over year. Both revenue carloads and average revenue per car increased 4% and 9%, respectively, on a year-over-year basis.
Industrial freight revenues totaled $1,911 million, up 22% year over year. Both revenue carloads and average revenue per car surged 14% and 6%, respectively, on a year-over-year basis.
Freight revenues in the Premium division were $1,568 million, up 1% year over year. Revenue carloads fell 9%, while average revenue per car increased 11% on a year-over-year basis.
Meanwhile, other revenues increased 24% to $400 million in the third quarter.
Liquidity
The company exited the third quarter of 2021 with cash and cash equivalents of $1,194 million compared with $1,799 million at the end of 2020. Debt (due after a year) increased to $27,560 million at the end of the quarter from $25,660 million at 2020-end. Debt-to-EBITDA ratio (on an adjusted basis) is at 2.8 compared with the December 2020-end figure of 2.9.
Sectorial Snapshot
Within the broader Transportation sector, Delta Air Lines (DAL - Free Report) , J.B. Hunt Transport Services (JBHT - Free Report) and Kansas City Southern recently reported third-quarter 2021 results.
Delta, reported third-quarter earnings (excluding $1.59 from non-recurring items) of 30 cents per share, outpacing the Zacks Consensus Estimate of 15 cents. Revenues of $9,154 million also beat the Zacks Consensus Estimate of $8,370.6 million.
J.B. Hunt, reported third-quarter earnings of $1.88 per share, surpassing the Zacks Consensus Estimate of $1.77. Total operating revenues of $3144.8 million outperformed the Zacks Consensus Estimate of $3002.1 million.
Kansas City Southern, reported third-quarter earnings (excluding 31 cents from non-recurring items) of $2.02 per share, missing the Zacks Consensus Estimate of $2.07. Quarterly revenues of $744 million, however, surpassed the Zacks Consensus Estimate of $725.9 million.
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Union Pacific Corporation (UNP - Free Report) reported better-than-expected third-quarter 2021 results.
Earnings of $2.57 per share surpassed the Zacks Consensus Estimate of $2.48. Moreover, the bottom line rallied 27.9% on a year-over-year basis.
Operating revenues of $5,566 million also beat the Zacks Consensus Estimate of $5,381.7 million. The top line increased 13.2% on a year-over-year basis due to an uptick in freight revenues (up 12% to $5,166 million). Business volumes, measured by total revenue carloads, were flat compared with third-quarter 2020 levels.
Operating income in the third quarter surged 20% year over year to $2,432 million. Total operating expenses escalated 9% to $3,134 million. Operating ratio (operating expenses, as a percentage of revenues) improved to 56.3% compared with 58.7% in the year-ago quarter, despite being hurt to the tune of 140 basis points by higher fuel prices. Notably, lower the value of the metric, the better.
This currently Zacks Rank #3 (Hold) company’s third-quarter effective tax rate rose to 23.3% from 23.1% in the year-ago quarter. In the third quarter, Union Pacific repurchased 8.6 million shares at an aggregate cost of $1.8 billion. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Segmental Performance
Bulk (Grain & grain products, Fertilizer, Food & refrigerated, Coal & renewables) freight revenues were $1,687 million, up 14% year over year. Both revenue carloads and average revenue per car increased 4% and 9%, respectively, on a year-over-year basis.
Industrial freight revenues totaled $1,911 million, up 22% year over year. Both revenue carloads and average revenue per car surged 14% and 6%, respectively, on a year-over-year basis.
Freight revenues in the Premium division were $1,568 million, up 1% year over year. Revenue carloads fell 9%, while average revenue per car increased 11% on a year-over-year basis.
Meanwhile, other revenues increased 24% to $400 million in the third quarter.
Liquidity
The company exited the third quarter of 2021 with cash and cash equivalents of $1,194 million compared with $1,799 million at the end of 2020. Debt (due after a year) increased to $27,560 million at the end of the quarter from $25,660 million at 2020-end. Debt-to-EBITDA ratio (on an adjusted basis) is at 2.8 compared with the December 2020-end figure of 2.9.
Sectorial Snapshot
Within the broader Transportation sector, Delta Air Lines (DAL - Free Report) , J.B. Hunt Transport Services (JBHT - Free Report) and Kansas City Southern recently reported third-quarter 2021 results.
Delta, reported third-quarter earnings (excluding $1.59 from non-recurring items) of 30 cents per share, outpacing the Zacks Consensus Estimate of 15 cents. Revenues of $9,154 million also beat the Zacks Consensus Estimate of $8,370.6 million.
J.B. Hunt, reported third-quarter earnings of $1.88 per share, surpassing the Zacks Consensus Estimate of $1.77. Total operating revenues of $3144.8 million outperformed the Zacks Consensus Estimate of $3002.1 million.
Kansas City Southern, reported third-quarter earnings (excluding 31 cents from non-recurring items) of $2.02 per share, missing the Zacks Consensus Estimate of $2.07. Quarterly revenues of $744 million, however, surpassed the Zacks Consensus Estimate of $725.9 million.
Infrastructure Stock Boom to Sweep America
A massive push to rebuild the crumbling U.S. infrastructure will soon be underway. It’s bipartisan, urgent, and inevitable. Trillions will be spent. Fortunes will be made.
The only question is “Will you get into the right stocks early when their growth potential is greatest?”
Zacks has released a Special Report to help you do just that, and today it’s free. Discover 5 special companies that look to gain the most from construction and repair to roads, bridges, and buildings, plus cargo hauling and energy transformation on an almost unimaginable scale.
Download FREE: How To Profit From Trillions On Spending For Infrastructure >>
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