Union Pacific Corporation’s (UNP - Free Report) fourth-quarter 2023 earnings of $2.71 per share beat the Zacks Consensus Estimate of $2.56. The bottom line improved 1.5% on a year-over-year basis.
Operating revenues of $6,159 million also beat the Zacks Consensus Estimate of $6,108.7 million. The top line was flat on a year-over-year basis on the back of increased volume and core pricing gains offset by reduced fuel surcharge revenue and business mix.
Freight revenues, accounting for 94.2% of the top line, increased 1% to $5,801 million. However, our projection for the metric fell marginally on a year-over-year basis. Other revenues declined 13% to $358 million in the fourth quarter. The downtick was more than our estimated fall of 7.8%. Business volumes, measured by total revenue carloads, were up 3%.
Operating income was flat year over year at $2.4 billion.
Total operating expenses of $3,752 million remained flat year over year. Fuel expenses plunged 11%. Expenses on purchased services and materials rose 2%.
Compensation and benefits were unchanged year over year. Other cost items grew 20% year over year.
The operating ratio (operating expenses as a percentage of revenues) improved by 10 basis points year over year to 60.9%.
Segmental Performance
Bulk (Grain & grain products, Fertilizer, Food & refrigerated, Coal & renewables) freight revenues were $1,938 million, unchanged on a year-over-year basis. However, we projected the metric to fall 1.1% from the year-ago levels. Segmental revenue carloads improved 3% year over year.
Industrial freight revenues totaled $2,078 million, up 4% year over year. Segmental revenue carloads grew 3% year over year.
Freight revenues in the Premium division were $1,785 million, down 3% year over year. The actual percentage decline was marginally less than our expectation of a 3.4% fall from the prior-year levels. Segmental revenue carloads improved 4% year over year.
Liquidity & Buyback
Union Pacific exited fourth-quarter 2023 with cash and cash equivalents of $1,055 million compared with $973 million at the end of 2022. Debt (due after a year) decreased to $31,156 million at fourth-quarter end from $31,648 million at 2022-end.
Currently, Union Pacific carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Outlook
Capital expenditure is projected to be $3.4 billion for full year 2024.
Management expects not to make any share repurchases in the first quarter.
Performances of Other Transportation Companies
J.B. Hunt Transport Services, Inc.’s (JBHT - Free Report) fourth-quarter 2023 earnings of $1.47 per share missed the Zacks Consensus Estimate of $1.74 and declined 23.4% year over year.
JBHT’s total operating revenues of $3,303.70 million surpassed the Zacks Consensus Estimate of $3,236.2 million but fell 9.5% year over year. Total operating revenues, excluding fuel surcharge revenues, fell 6% year over year.
Delta Air Lines (DAL - Free Report) reported fourth-quarter 2023 earnings (excluding $1.88 from non-recurring items) of $1.28 per share, which comfortably beat the Zacks Consensus Estimate of $1.17. Earnings, however, declined 13.51% on a year-over-year basis due to high labor costs.
Revenues of $14,223 million surpassed the Zacks Consensus Estimate of $14,069.5 million and increased 5.87% on a year-over-year basis driven by strong holiday-air-travel demand. Adjusted operating revenues (excluding third-party refinery sales) came in at $13,661 million, up 11% year over year.
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Union Pacific Corporation’s (UNP - Free Report) fourth-quarter 2023 earnings of $2.71 per share beat the Zacks Consensus Estimate of $2.56. The bottom line improved 1.5% on a year-over-year basis.
Operating revenues of $6,159 million also beat the Zacks Consensus Estimate of $6,108.7 million. The top line was flat on a year-over-year basis on the back of increased volume and core pricing gains offset by reduced fuel surcharge revenue and business mix.
Freight revenues, accounting for 94.2% of the top line, increased 1% to $5,801 million. However, our projection for the metric fell marginally on a year-over-year basis. Other revenues declined 13% to $358 million in the fourth quarter. The downtick was more than our estimated fall of 7.8%. Business volumes, measured by total revenue carloads, were up 3%.
Operating income was flat year over year at $2.4 billion.
Total operating expenses of $3,752 million remained flat year over year. Fuel expenses plunged 11%. Expenses on purchased services and materials rose 2%.
Compensation and benefits were unchanged year over year. Other cost items grew 20% year over year.
The operating ratio (operating expenses as a percentage of revenues) improved by 10 basis points year over year to 60.9%.
Segmental Performance
Bulk (Grain & grain products, Fertilizer, Food & refrigerated, Coal & renewables) freight revenues were $1,938 million, unchanged on a year-over-year basis. However, we projected the metric to fall 1.1% from the year-ago levels. Segmental revenue carloads improved 3% year over year.
Industrial freight revenues totaled $2,078 million, up 4% year over year. Segmental revenue carloads grew 3% year over year.
Freight revenues in the Premium division were $1,785 million, down 3% year over year. The actual percentage decline was marginally less than our expectation of a 3.4% fall from the prior-year levels. Segmental revenue carloads improved 4% year over year.
Liquidity & Buyback
Union Pacific exited fourth-quarter 2023 with cash and cash equivalents of $1,055 million compared with $973 million at the end of 2022. Debt (due after a year) decreased to $31,156 million at fourth-quarter end from $31,648 million at 2022-end.
Currently, Union Pacific carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Outlook
Capital expenditure is projected to be $3.4 billion for full year 2024.
Management expects not to make any share repurchases in the first quarter.
Performances of Other Transportation Companies
J.B. Hunt Transport Services, Inc.’s (JBHT - Free Report) fourth-quarter 2023 earnings of $1.47 per share missed the Zacks Consensus Estimate of $1.74 and declined 23.4% year over year.
JBHT’s total operating revenues of $3,303.70 million surpassed the Zacks Consensus Estimate of $3,236.2 million but fell 9.5% year over year. Total operating revenues, excluding fuel surcharge revenues, fell 6% year over year.
Delta Air Lines (DAL - Free Report) reported fourth-quarter 2023 earnings (excluding $1.88 from non-recurring items) of $1.28 per share, which comfortably beat the Zacks Consensus Estimate of $1.17. Earnings, however, declined 13.51% on a year-over-year basis due to high labor costs.
Revenues of $14,223 million surpassed the Zacks Consensus Estimate of $14,069.5 million and increased 5.87% on a year-over-year basis driven by strong holiday-air-travel demand. Adjusted operating revenues (excluding third-party refinery sales) came in at $13,661 million, up 11% year over year.
Zacks Names #1 Semiconductor Stock
It's only 1/9,000th the size of NVIDIA which skyrocketed more than +800% since we recommended it. NVIDIA is still strong, but our new top chip stock has much more room to boom.
With strong earnings growth and an expanding customer base, it's positioned to feed the rampant demand for Artificial Intelligence, Machine Learning, and Internet of Things. Global semiconductor manufacturing is projected to explode from $452 billion in 2021 to $803 billion by 2028.
See This Stock Now for Free >>
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