Union Pacific (UNP) Tops Earnings & Revenue Estimates In Q2
Zacks Investment Research | Jul 19, 2017 10:30PM ET
Union Pacific Corporation's (NYSE:UNP) second-quarter 2017 earnings of $1.45 beat the Zacks Consensus Estimate of $1.37 per share. The bottom line expanded 23.93% on a year-over-year basis. Results were aided by higher revenues. In fact, the earnings beat pleased the investors, leading to an increase in the stock price in pre-market trading.
Operating revenues of $5,250 million beat the Zacks Consensus Estimate of $5,162.7 million. Revenues increased 10.1% on a year-over-year basis. The bulk of revenues (93.4%) at Union Pacific were derived from freight in the reported quarter.
Freight revenues increased 11%, thereby boosting the top line. The uptick was owing to volume growth, increased fuel surcharge revenues among other factors.
Operating income in the second quarter rose 21% year over year to $2 billion. Operating ratio (defined as operating expenses as a percentage of revenues) came in at 61.8%, reflecting an improvement of 340 basis points on a year-over-year basis. The metric benefited from higher fuel prices.
During the quarter, the company bought back 7.8 million shares for $850 million. Union Pacific expects the scenario regarding business volumes to improve in the second half of the year.
Segment Details
Agricultural Products freight revenues were $907 million, up 7% year over year. Business volumes increased 3% year over year. Average revenue per car also climbed 3%.
Automotive accounted for $513 million of freight revenues, up 5% year over year. Business volumes were down 1% and average revenue per car climbed 6% year over year.
Chemicals contributed $898 million to freight revenues, up 4% year over year. Business volumes were down 2%, while average revenue per car improved 6%.
Coal revenues (freight) increased 25% year over year to $619 million. Business volumes increased 17% and average revenue per car improved 7% year over year.
Industrial Products generated freight revenues of $1,030 million, up 24% year over year on a 15% growth in business volumes. Average revenue per car was up 8%.
Intermodal segment freight revenues came in at $939 million, up 3% year over year. Business volumes were up 2%, while average revenue per car improved 1%.
Other revenues improved 1% to $344 million in the second quarter of 2017.
Union Pacific Corporation Price, Consensus and EPS Surprise
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