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Union Pacific (UNP) Beats on Earnings, Revenues in Q3
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Union Pacific Corporation’s (UNP - Free Report) third-quarter 2017 earnings of $1.50 beat the Zacks Consensus Estimate of $1.49 per share. The bottom line expanded 10.3% on a year-over-year basis. Results were aided by higher revenues.
Operating revenues of $5,408 million also surpassed the Zacks Consensus Estimate of $5,306.5 million. Revenues increased 4.5% on a year-over-year basis. The bulk of revenues (93.4%) at Union Pacific was derived from freight in the reported quarter.
Freight revenues grew 4%, boosting the top line. The uptick was owing to volume growth and increased fuel surcharge revenues among other factors.
Operating income in the third quarter rose 3% year over year to $2 billion. Operating ratio (defined as operating expenses as a percentage of revenues) came in at 62.8% in the third quarter compared with 62.1% in the year-ago quarter. The deterioration was due to higher fuel prices.
During the quarter, the company bought back 11.8 million shares for $1.3 billion.
Segment Details
Agricultural Products freight revenues were $914 million, down 2% year over year. Business volumes decreased 10%year over year. Average revenue per car however increased 9%.
Automotive accounted for $469 million of freight revenues, down 3% year over year. Business volumes were also down 5% and average revenue per car inched up 1% year over year.
Chemicals contributed $896 million to freight revenues, up 2% year over year. Business volumes were down 5%, while average revenue per car improved 8%.
Coal revenues (freight) fell 2% year over year to $711 million. Business volumes decreased 3% and average revenue per car was flat on a year-over-year basis.
Industrial Products generated freight revenues of $1,079 million, up 26% year over year on 15% growth in business volumes. Average revenue per car was up 10%.
Intermodal segment freight revenues came in at $981 million, up 3% year over year. Business volumes were flat, while average revenue per car improved 2%.
Other revenues improved 6% to $358 million in the third quarter of 2017.
Union Pacific Corporation Price, Consensus and EPS Surprise
Union Pacific exited the quarter with cash and cash equivalents of $1,847 million compared with $1,277 million at the end of 2016. Debt (due after one year) came in at $15,930 million at the end of the quarter compared with $14,249 million at the end of 2016. Adjusted debt-to-capitalization ratio increased to 50.4% from 47.3% at 2016-end.
Zacks Rank & Key Picks
Union Pacific currently carries a Zacks Rank #3 (Hold).
Shares of Deutsche Lufthansa, International Consolidated Airlines and Bristow Group have gained more than 46%, 14% and 22%, respectively in the last three months.
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Union Pacific (UNP) Beats on Earnings, Revenues in Q3
Union Pacific Corporation’s (UNP - Free Report) third-quarter 2017 earnings of $1.50 beat the Zacks Consensus Estimate of $1.49 per share. The bottom line expanded 10.3% on a year-over-year basis. Results were aided by higher revenues.
Operating revenues of $5,408 million also surpassed the Zacks Consensus Estimate of $5,306.5 million. Revenues increased 4.5% on a year-over-year basis. The bulk of revenues (93.4%) at Union Pacific was derived from freight in the reported quarter.
Freight revenues grew 4%, boosting the top line. The uptick was owing to volume growth and increased fuel surcharge revenues among other factors.
Operating income in the third quarter rose 3% year over year to $2 billion. Operating ratio (defined as operating expenses as a percentage of revenues) came in at 62.8% in the third quarter compared with 62.1% in the year-ago quarter. The deterioration was due to higher fuel prices.
During the quarter, the company bought back 11.8 million shares for $1.3 billion.
Segment Details
Agricultural Products freight revenues were $914 million, down 2% year over year. Business volumes decreased 10%year over year. Average revenue per car however increased 9%.
Automotive accounted for $469 million of freight revenues, down 3% year over year. Business volumes were also down 5% and average revenue per car inched up 1% year over year.
Chemicals contributed $896 million to freight revenues, up 2% year over year. Business volumes were down 5%, while average revenue per car improved 8%.
Coal revenues (freight) fell 2% year over year to $711 million. Business volumes decreased 3% and average revenue per car was flat on a year-over-year basis.
Industrial Products generated freight revenues of $1,079 million, up 26% year over year on 15% growth in business volumes. Average revenue per car was up 10%.
Intermodal segment freight revenues came in at $981 million, up 3% year over year. Business volumes were flat, while average revenue per car improved 2%.
Other revenues improved 6% to $358 million in the third quarter of 2017.
Union Pacific Corporation Price, Consensus and EPS Surprise
Union Pacific Corporation Price, Consensus and EPS Surprise | Union Pacific Corporation Quote
Liquidity
Union Pacific exited the quarter with cash and cash equivalents of $1,847 million compared with $1,277 million at the end of 2016. Debt (due after one year) came in at $15,930 million at the end of the quarter compared with $14,249 million at the end of 2016. Adjusted debt-to-capitalization ratio increased to 50.4% from 47.3% at 2016-end.
Zacks Rank & Key Picks
Union Pacific currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader Transportation sector are Deutsche Lufthansa AG (DLAKY - Free Report) , International Consolidated Airlines Group SA (ICAGY - Free Report) and Bristow Group Inc . While Deutsche Lufthansa and International Consolidated Airlines sport a Zacks Rank #1 (Strong Buy), Bristow Group carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Shares of Deutsche Lufthansa, International Consolidated Airlines and Bristow Group have gained more than 46%, 14% and 22%, respectively in the last three months.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
See the pot trades we're targeting>>