Union Pacific (UNP 0.65%), a cornerstone in the American railway sector, reported its Q1 2024 earnings on April 25, showcasing a financial performance that exceeded analyst expectations. With earnings per diluted share at $2.69, the company not only surpassed the $2.51 analysts were expecting, but also marked a slight increase from the previous year's $2.67. Similarly, its operating revenue reached $6.031 billion, marginally above the forecast. This performance illustrates Union Pacific's resilience and strategic adaptability in a challenging freight market environment.
| Metric | Q1 2024 Actual | Analyst Estimate | Q1 2023 Actual | % Change (YOY) |
|---|---|---|---|---|
| Earnings per share (EPS) | $2.69 | $2.51 | $2.67 | 0.75% |
| Operating revenue | $6.031 billion | $5.974 billion | $6.056 billion | (0.4%) |
| Operating expenses | $3.659 billion | N/A | $3.762 billion | (2.7%) |
| Operating income | $2.372 billion | N/A | $2.294 billion | 3.4% |
About Union Pacific
Union Pacific stands as a pivotal player within the U.S. transportation and logistics industry, facilitating freight movement across 23 states and connecting key ports and gateway cities to Mexico and Canada.
The company has firmly focused on enhancing operational safety, leveraging technological advancements for efficiency gains, and strategically navigating the freight demand landscape.
Quarterly highlights
Demonstrating operational efficiency, Union Pacific reported notable improvements across key metrics such as freight car velocity and locomotive productivity. A 4% increase in daily miles per freight car and a 10% bump in gross ton-miles per horsepower day underline the company's strides toward maximizing efficiency. There was also a 1% increase in train length.
Moreover, Union Pacific's financial strength is evident in its operating income, which experienced a 3.4% rise to $2.4 billion. The company attributed this bump to pricing gains and the mix of freight helping to offset lower volume and reduced fuel surcharge revenue.
The quarter also saw Union Pacific focus on bolstering its safety measures, resulting in improved reportable personal injury and derailment rates.
Looking ahead
Union Pacific's outlook for 2024 embraces cautious optimism. The company anticipates continued momentum in profitability, underpinned by strong service offerings, network efficiency improvements, and solid pricing strategies. Yet, it acknowledges the looming uncertainties around volume outlooks, citing challenges like international intermodal business loss and lower coal demand. The company said it plans to restart share buybacks this quarter.
