Union Pacific Corporation UNP delivered mixed results in the fourth quarter of 2017. Evidently, the company reported lower-than-expected earnings per share but better-than-expected revenues.
The company’s earnings of $1.53 per share (excluding $7.72 from non-recurring items) fell short of the Zacks Consensus Estimate by a penny. The earnings miss disappointed investors, leading to a decrease in the stock price in early trading. However, revenues of $5,450 million surpassed the Zacks Consensus Estimate of $5,409.3 million. Earnings per share and revenues expanded 10.1% and 5.5% respectively year over year.
Freight revenues increased 5%, thereby boosting the top line. The uptick was owing to volume growth, increased fuel surcharge revenues among other factors.
Operating income (on a reported basis) in the fourth quarter rose 15% year over year to $2, 251 million. Adjusted operating ratio (defined as operating expenses as a percentage of revenues) came in at 62.6%, reflecting an increase of 0.6 points. Fuel prices increased substantially in the final quarter of 2017. During the quarter, the company bought back 9.2 million shares for $1.1 billion.
Union Pacific Corporation Price, Consensus and EPS Surprise
Union Pacific Corporation Price, Consensus and EPS Surprise | Union Pacific Corporation Quote
Segment Details
Agricultural Products freight revenues were $922 million, down 4% year over year. Business volumes decreased 7% year over year. Average revenue per car increased 3%.
Automotive accounted for $512 million of freight revenues, down 1% year over year. Business volumes were down 4% and average revenue per car climbed 1% year over year.
Chemicals contributed $917 million to freight revenues, up 7% year over year. Business volumes were up 5%, while average revenue per car improved 2%.
Coal revenues (freight) decreased 5% year over year to $667 million. Business volumes decreased 3% and average revenue per car declined 2% year over year.
Industrial Products generated freight revenues of $1,062 million, up 28% year over year on a 17% growth in business volumes. Average revenue per car was up 10%.
Intermodal segment freight revenues came in at $1,007 million, up 4% year over year. Business volumes were flat year over year, while average revenue per car improved 4%.
Other revenues improved 8% to $363 million in the fourth quarter of 2017.
Liquidity
This Zacks Rank #2 (Buy) company exited 2017 with cash and cash equivalents of $1,275 million compared with $1,277 million at the end of 2016. Debt (due after one year) came in at $16,144 million at the end of the year compared with $14,249 million at the end of 2016. Adjusted debt-to-capitalization ratio decreased to 43.9% from 47.3% at 2016-end. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Upcoming Releases
Investors interested in the Zacks Transportation sector are keenly awaiting fourth-quarter earnings reports from key players like Hawaiian Holdings HA, Allegiant Travel Company ALGT and Spirit Airlines SAVE in the coming days. While Hawaiian Holdings is scheduled to report on Jan 29, Allegiant and Spirit Airlines is scheduled to report the same on Jan 31 and Feb 6, respectively.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +18.8% from 2016 – Q1 2017, our top stock-picking screens have returned +157.0%, +128.0%, +97.8%, +94.7%, and +90.2% respectively.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 – Q1 2017, the composite yearly average gain for these strategies has beaten the market more than 11X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Be the first to comment