Union Pacific Corporation’s UNP third-quarter 2024 earnings of $2.75 per share marginally missed the Zacks Consensus Estimate of $2.76 per share. However, the bottom line improved 9.6% on a year-over-year basis. The year-over-year improvement was due to strong operational efficiency and favorable pricing.
Find the latest EPS estimates and surprises on Zacks Earnings Calendar.
Operating revenues of $6.09 billion lagged the Zacks Consensus Estimate of $6.19 billion. However, the top line improved by 2.5% on a year-over-year basis due to core pricing gains and higher volumes.
Freight revenues, accounting for 94.7% of the top line, increased 4% to $5.77 billion. The actual figure surpassed our estimate of $5.72 billion. Other revenues decreased 18% to $323 million in the third quarter of 2024. Business volumes, measured by total revenue carloads, increased by 6% year over year.
The operating income was up 11% year over year at $2.4 billion.
Total operating expenses of $3.68 billion declined 2% year over year. Fuel expenses plunged 13%. Expenses on purchased services and materials fell by 4%, and other cost items declined 6% year over year.
The operating ratio (operating expenses as a percentage of revenues) improved by 310 basis points year over year to 60.3%. Lower quarterly fuel prices positively impacted the operating ratio by 120 basis points.
Union Pacific Corporation Price, Consensus and EPS Surprise
Union Pacific Corporation price-consensus-eps-surprise-chart | Union Pacific Corporation Quote
UNP’s Segmental Highlights
Bulk (Grain & grain products, Fertilizer, Food & refrigerated, Coal & renewables) freight revenues were $1.80 billion, which increased 2% on a year-over-year basis. However, we had projected the metric to fall 0.3% from the year-ago levels. Segmental revenue carloads declined 3% year over year.
Industrial freight revenues totaled $2.12 billion, up 3% year over year. Segmental revenue carloads fell by 2% year over year.
Freight revenues in the Premium division were $1.84 billion, up 7% year over year. However, we had expected the metric to increase 6.6% compared with the year-ago reported figure. Premium revenue carloads improved 14% year over year.
UNP’s Liquidity
Union Pacific exited the third quarter of 2024 with cash and cash equivalents of $947 million compared with $1.06 billion in the fourth quarter of 2023. Debt (due after a year) decreased to $29.76 billion in the September-end quarter from $31.16 billion at 2023’s 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.
UNP’s Outlook
Union Pacific now expects fourth-quarter results to be consistent sequentially from the third quarter while improving year over year versus the fourth quarter of 2023.
The company continues to remain optimistic about current-year profitability, expecting it to gain momentum due to a robust service product, enhanced network efficiency and stable pricing.
Management also plans to repurchase approximately $1.5 billion in shares in 2024 and anticipates capital expenditures of $3.4 billion for the entire year.
Q3 Performances of Other Transportation Companies
Delta Air Lines DAL reported third-quarter 2024 earnings (excluding 47 cents from non-recurring items) of $1.50 per share, which fell short of the Zacks Consensus Estimate of $1.56. Earnings decreased 26.11% on a year-over-year basis due to high labor costs.
Revenues of $15.68 billion surpassed the Zacks Consensus Estimate of $15.37 billion and increased 1.2% on a year-over-year basis, driven by strong air travel demand. Adjusted operating revenues (excluding third-party refinery sales) totaled $14.59 billion, flat year over year. This included the $380 million impact of the outage caused by CrowdStrike CRWD.
Norfolk Southern Corporation’s NSC third-quarter 2024 earnings (excluding $1.6 from non-recurring items) of $3.25 per share beat the Zacks Consensus Estimate of $3.10 and increased 22.6% year over year due to lower costs.
Railway operating revenues were $3.05 billion in the quarter under review, lagging the Zacks Consensus Estimate of $3.09 billion. The top line increased 2.7% year over year, with the Merchandise and Intermodal segments registering an improvement in revenues.
J.B. Hunt Transport Services’ JBHT third-quarter 2024 earnings of $1.49 per share outpaced the Zacks Consensus Estimate of $1.42 but declined 17.2% year over year.
Total operating revenues of $3.07 billion surpassed the Zacks Consensus Estimate of $3.04 billion but fell 3% year over year. The operating income for the September quarter decreased 7% year over year to $224.1 million.
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