Union Pacific Corporation (UNP) Up on Q1 Earnings Beat

Union Pacific Corporation's UNP first quarter 2017 earnings of $1.32 beat the Zacks Consensus Estimate of $1.23 per share. The bottom-line expanded 13.8% on a year-over-year basis.

Results were aided by higher revenues. The earnings beat pleased the investors. As a result, the stock gained in early trading.

Operating revenues of $5,132 million beat the Zacks Consensus Estimate of $4,997.7 million. Revenues increased 6.3% on a year over year basis. The bulk of revenues (93.4%) at Union Pacific are derived from freight in the reported quarter.

Freight revenues increased 6%, thereby boosting the top line. Freight revenues increased due to volume growth, increased fuel surcharge revenues among other factors.

Operating income in the first quarter climbed 6% year over year to $1.8 billion. Operating ratio (defined as operating expenses as a percentage of revenues) came in at 65.1%, flat year-over-year. During the quarter, the company bought back 7.5 million shares for $802 million.

Segment Details

Agricultural Products freight revenues were $942 million, up 7% year over year. Business volumes increased 6% year over year, while average revenue per car climbed 1%.

Automotive accounted for $504 million of freight revenues, down 1% year over year. Business volumes were down 2% and average revenue per car climbed 1% year over year.

Chemicals contributed $885 million to freight revenues, up 1% year over year. Volumes were down 4%, while average revenue per car improved 5%.

Coal revenues (freight) increased 25% year over year to $648 million. Volumes grew 16% and average revenue per car improved 8% year over year.

Industrial Products generated freight revenues of $907 million, up 9% year over year on an 1% volume growth. Average revenue per car was up 7%.

Intermodal segment freight revenues came in at $908 million, up 3% year over year. Volumes were flat while average revenue per car improved 3%.

Other revenues improved 3% to $338 million in the first quarter of 2017.

Liquidity

Union Pacific exited the quarter with cash and cash equivalents of $1,049 million, compared with $1,277 million at the end of 2016. Debt (due after 1 year) came in at $14, 310 million at the end of the quarter compared with $14,249 million at the end of 2016. Adjusted debt-to-capitalization ratio increased to 47.4% from 47.3% at 2016-end.

Union Pacific Corporation Price, Consensus and EPS Surprise

 

Union Pacific Corporation Price, Consensus and EPS Surprise | Union Pacific Corporation Quote

Other Key Releases Coming Up

Investors interested in the broader transportation space keenly await the first-quarter earnings reports of Spirit Airlines SAVE, Copa Holdings CPA and Air Lease Corp. AL that are slated to be released on Apr 28, May 10 and May 4, respectively.

Zacks Rank

Union Pacific currently carries a Zacks Rank # 3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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