Breaking News
0

Why Is Union Pacific (UNP) Down 1.2% Since Last Earnings Report?

By Zacks Investment ResearchStock MarketsMay 17, 2019 09:30PM ET
www.investing.com/analysis/why-is-union-pacific-unp-down-12-since-last-earnings-report-200422753
Why Is Union Pacific (UNP) Down 1.2% Since Last Earnings Report?
By Zacks Investment Research   |  May 17, 2019 09:30PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 

It has been about a month since the last earnings report for Union Pacific (UNP). Shares have lost about 1.2% in that time frame, outperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Union Pacific due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.

Earnings Beat at Union Pacific in Q1

The company’s earnings of $1.93 per share surpassed the Zacks Consensus Estimate by 4 cents. The bottom line also increased 15% on a year-over-year basis primarily due to lower costs.

Operating revenues came in at $5,384 million, which fell short of the Zacks Consensus Estimate of $5,475.3 million. The figure also decreased 2% year over year due to sluggish freight revenues (down 2%). The downside was due to a 2% decline in business volumes. Bulk of revenues (93.1%) at Union Pacific was derived from freight in the reported quarter.

Operating income in the first quarter increased 1% year over year to $2 billion. Operating ratio (defined as operating expenses as a percentage of revenues) improved to 63.6% from 64.6% a year-ago. Notably, lower the value of the metric the better.

Moreover, Union Pacific bought back 18.1 million shares during the quarter for $3.5 billion. Effective tax rate during the first quarter of 2019 came in at 22.3% compared with 23.4% a year ago.

Segmental Performance

Freight revenues in the Agricultural Products were $1,067 million, down 3% year over year. Revenue carloads declined 7% year over year. However, average revenue per car increased 5%.

Freight revenues in the Energy division were $982 million, down 16% year over year. Also, revenue carloads fell 15% year over year. Moreover, average revenue per car decreased 2% year over year.

Industrial freight revenues totaled $1,410 million, up 5% year over year. Revenue carloads increased 4% year over year. Also, average revenue per car was up 1%.

Freight revenues in the Premium division were $1,551 million, up 3% year over year. Revenue carloads increased 2% year over year. Average revenue per car was flat year over year.

Other revenues improved 6% to $374 million in the first quarter of 2019.

Liquidity

The company exited the quarter with cash and cash equivalents of $1,059 million compared with $1,273 million at the end of 2018. Debt (due after one year) came in at $23,409 million at the end of the quarter compared with $20,925 million at the end of 2018. Debt-to-EBITDA ratio (on an adjusted basis) increased to 2.6 from 2.3 at 2018-end.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed an upward trend in fresh estimates.

VGM Scores

At this time, Union Pacific has an average Growth Score of C, however its Momentum Score is doing a lot better with an A. However, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Union Pacific has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.



Union Pacific Corporation (NYSE:UNP): Free Stock Analysis Report

Original post
Why Is Union Pacific (UNP) Down 1.2% Since Last Earnings Report?
 
Why Is Union Pacific (UNP) Down 1.2% Since Last Earnings Report?

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email