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Union Pacific (UNP) Q4 Earnings Beat, Revenues Remain Flat
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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.
Union Pacific Corporation Price, Consensus and EPS Surprise
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.
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 (UNP) Q4 Earnings Beat, Revenues Remain Flat
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.
Union Pacific Corporation Price, Consensus and EPS Surprise
Union Pacific Corporation price-consensus-eps-surprise-chart | Union Pacific Corporation Quote
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.