Summary
Union Pacific Corporation (UNP) reported solid financial results for the nine months ended September 30, 2017, with operating revenues increasing by 7% year-over-year to $15.8 billion and net income rising by 11% to $3.4 billion. This growth was driven by increased freight revenues, which saw a 7% uptick, supported by core pricing gains, higher fuel surcharges, and an increase in key commodity volumes like industrial products and coal. The company also demonstrated effective cost management, with operating expenses increasing at a slower pace than revenues, resulting in an improved operating ratio for the year-to-date period. For the third quarter, the company reported a 5% increase in total operating revenues to $5.4 billion, with net income reaching $1.2 billion, a 5.6% increase year-over-year. Despite a slight dip in overall carloadings, a higher average revenue per car (ARC) compensated for this, indicating successful revenue management strategies. Management has also continued to focus on productivity initiatives, with a 2% decrease in workforce levels offsetting a 1% decline in volumes during the third quarter. The company remains committed to shareholder returns, actively engaging in share repurchases and paying dividends.
Financial Highlights
47 data points| Revenue | $5.41B |
| Operating Expenses | $3.33B |
| Operating Income | $2.07B |
| Interest Expense | $180.00M |
| Net Income | $1.19B |
| EPS (Basic) | $1.50 |
| EPS (Diluted) | $1.50 |
| Shares Outstanding (Basic) | 794.50M |
| Shares Outstanding (Diluted) | 797.60M |
Key Highlights
- 1Total operating revenues for the nine months ended September 30, 2017, increased by 7% to $15.8 billion, compared to $14.8 billion in the prior year.
- 2Net income for the nine months increased by 11% to $3.4 billion, or $4.26 per diluted share, up from $3.1 billion, or $3.68 per diluted share, in the same period of 2016.
- 3Freight revenues for the third quarter of 2017 grew by 4% to $5.1 billion, driven by a 5% increase in average revenue per car (ARC), which offset a 1% decline in volume.
- 4Operating expenses increased by 6% for the third quarter, but the operating ratio improved year-over-year for the nine-month period to 63.2% from 64.1%.
- 5The company repurchased approximately 27.1 million shares of common stock during the first nine months of 2017 under its new $12.0 billion share repurchase program.
- 6Cash provided by operating activities for the first nine months was $5.4 billion, while free cash flow was $1.7 billion.
- 7The company reported a workforce reduction plan in the third quarter, resulting in an $84 million pre-tax charge.