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Union Pacific (UNP) Q3 Earnings Miss Estimates, Down Y/Y

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Union Pacific Corporation’s (UNP - Free Report) third-quarter 2020 earnings of $2.01 per share missed the Zacks Consensus Estimate of $2.03. Moreover, the bottom line declined 9.5% on a year-over-year basis.

Operating revenues of $4,919 million also missed the Zacks Consensus Estimate of $4,983 million. Moreover, the top line declined 10.8% on a year-over-year basis due to sluggish freight revenues (down 11% to $4,596 million). Business volumes, measured by total revenue carloads, declined 4% year over year.

Operating income in the third quarter declined 9% year over year to $2,031 million. Operating expenses contracted 12% to $2,888 million. Meanwhile, operating ratio (operating expenses, as a percentage of revenues) improved to 58.7% from 59.5% in the year-ago quarter driven by lower fuel prices. Lower the value the better.

Moreover, this Zacks Rank #2 (Buy) company’s third-quarter effective tax rate is flat at 23.1% with its year-ago quarter. Total capital expenses were$2,294 million in the third quarter. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

United Airlines Holdings Inc Price, Consensus and EPS Surprise

 

United Airlines Holdings Inc Price, Consensus and EPS Surprise

United Airlines Holdings Inc price-consensus-eps-surprise-chart | United Airlines Holdings Inc Quote

Segmental Performance

Bulk (Grain & grain products, Fertilizer, Food & refrigerated, Coal & renewables) freight revenues were $1,478 million, down 12% year over year. Revenue carloads too slid 9%. Moreover, average revenue per car fell 3% year over year.

Industrial freight revenues totaled $1,567 million, down 18% year over year. Also, revenue carloads fell 16% and average revenue per car fell 2% on a year-over-year basis.

Freight revenues in the Premium division were $1,551 million, down 1% year over year. Average revenue per car also declined 6%. However, revenue carloads rose 5% year over year.  

Meanwhile, other revenues slipped 13% to $323 million in the third quarter.

Liquidity

The company exited the September end quarter with cash and cash equivalents of $2,601 million compared with $831 million at the end of 2019. Debt (due after a year) amounted to $26,080 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.

Sectorial Snapshot

Apart from Union Pacific, let’s take a look into some other Zacks Transportation sector’s third-quarter earnings like Delta Air Lines (DAL - Free Report) , J.B. Hunt Transport Services (JBHT - Free Report) and  United Airlines Holdings, Inc. (UAL - Free Report) .

Delta incurred a loss (excluding $5.17 from non-recurring items) of $3.30 per share in the September quarter, wider than the Zacks Consensus Estimate of a loss of $3.14. Meanwhile, Delta reported earnings of $2.32 per share (on an adjusted basis) in the year-ago quarter, driven by high passenger revenues as air-travel demand was buoyant at that time.

J.B. Hunt reported mixed third-quarter 2020 results, with earnings missing estimates and revenues beating the same. Quarterly earnings of $1.18 per share fell short of the Zacks Consensus Estimate of $1.26. Moreover, the bottom line declined 15.7% year over year due to disappointing performance of its intermodal (JBI) unit. Total operating revenues increased 4.6% to $2,472.5 million. Revenues also beat the consensus mark of $2,345.2 million.

United Airlines incurred a loss (excluding $1.83 from non-recurring items) of $8.16 per share, comparing unfavorably with the Zacks Consensus Estimate of a loss of $7.63. Results were hurt by the coronavirus-induced weakness in air-travel demand. Moreover, operating revenues of $2,489 million slumped 78.1% year over year and also lagged the Zacks Consensus Estimate of $2,570.1 million. This year-over-year plunge was due to an 84.3% drop in passenger revenues to $1,649 million.

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