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Union Pacific (UNP) Q3 Earnings Miss Estimates, Down Y/Y

Zacks Equity Research
·4 min read

Union Pacific Corporation’s UNP third-quarter 2020 earnings of $2.01 per share missed the Zacks Consensus Estimate of $2.03. Moreover, the bottom line declined 9.5% on a year-over-year basis.

Operating revenues of $4,919 million also missed the Zacks Consensus Estimate of $4,983 million. Moreover, the top line declined 10.8% on a year-over-year basis due to sluggish freight revenues (down 11% to $4,596 million). Business volumes, measured by total revenue carloads, declined 4% year over year.

Operating income in the third quarter declined 9% year over year to $2,031 million. Operating expenses contracted 12% to $2,888 million. Meanwhile, operating ratio (operating expenses, as a percentage of revenues) improved to 58.7% from 59.5% in the year-ago quarter driven by lower fuel prices. Lower the value the better.

Moreover, this Zacks Rank #2 (Buy) company’s third-quarter effective tax rate is flat at 23.1% with its year-ago quarter. Total capital expenses were$2,294 million in the third quarter. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

United Airlines Holdings Inc Price, Consensus and EPS Surprise

 

United Airlines Holdings Inc Price, Consensus and EPS Surprise
United Airlines Holdings Inc Price, Consensus and EPS Surprise

United Airlines Holdings Inc price-consensus-eps-surprise-chart | United Airlines Holdings Inc Quote

Segmental Performance

Bulk (Grain & grain products, Fertilizer, Food & refrigerated, Coal & renewables) freight revenues were $1,478 million, down 12% year over year. Revenue carloads too slid 9%. Moreover, average revenue per car fell 3% year over year.

Industrial freight revenues totaled $1,567 million, down 18% year over year. Also, revenue carloads fell 16% and average revenue per car fell 2% on a year-over-year basis.

Freight revenues in the Premium division were $1,551 million, down 1% year over year. Average revenue per car also declined 6%. However, revenue carloads rose 5% year over year.  

Meanwhile, other revenues slipped 13% to $323 million in the third quarter.

Liquidity

The company exited the September end quarter with cash and cash equivalents of $2,601 million compared with $831 million at the end of 2019. Debt (due after a year) amounted to $26,080 million at the end of the quarter from $23,943 million at 2019-end. Debt-to-EBITDA ratio (on an adjusted basis) deteriorated to 2.9 from 2.5 at 2019-end.

Sectorial Snapshot

Apart from Union Pacific, let’s take a look into some other Zacks Transportation sector’s third-quarter earnings like Delta Air Lines DAL , J.B. Hunt Transport Services JBHT and  United Airlines Holdings, Inc. UAL .

Delta incurred a loss (excluding $5.17 from non-recurring items) of $3.30 per share in the September quarter, wider than the Zacks Consensus Estimate of a loss of $3.14. Meanwhile, Delta reported earnings of $2.32 per share (on an adjusted basis) in the year-ago quarter, driven by high passenger revenues as air-travel demand was buoyant at that time.

J.B. Hunt reported mixed third-quarter 2020 results, with earnings missing estimates and revenues beating the same. Quarterly earnings of $1.18 per share fell short of the Zacks Consensus Estimate of $1.26. Moreover, the bottom line declined 15.7% year over year due to disappointing performance of its intermodal (JBI) unit. Total operating revenues increased 4.6% to $2,472.5 million. Revenues also beat the consensus mark of $2,345.2 million.

United Airlines incurred a loss (excluding $1.83 from non-recurring items) of $8.16 per share, comparing unfavorably with the Zacks Consensus Estimate of a loss of $7.63. Results were hurt by the coronavirus-induced weakness in air-travel demand. Moreover, operating revenues of $2,489 million slumped 78.1% year over year and also lagged the Zacks Consensus Estimate of $2,570.1 million. This year-over-year plunge was due to an 84.3% drop in passenger revenues to $1,649 million.

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Union Pacific Corporation (UNP) : Free Stock Analysis Report
 
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