10-QPeriod: Q3 FY2024

UNION PACIFIC CORP Quarterly Report for Q3 Ended Sep 30, 2024

Filed October 24, 2024For Securities:UNP

Summary

Union Pacific Corporation (UNP) reported solid financial results for the third quarter and the first nine months of 2024, demonstrating resilience and operational improvements. For the third quarter, operating revenues increased by 3% to $6.1 billion, driven by a 6% increase in freight volumes and core pricing gains, which more than offset negative mix impacts and lower fuel surcharge revenues. Net income rose to $1.7 billion, or $2.75 per diluted share, up from $1.5 billion, or $2.51 per diluted share, in the prior year's quarter. The company achieved an improved operating ratio of 60.3% compared to 63.4% in Q3 2023, reflecting significant productivity gains, lower fuel prices, and efficient network management. Year-to-date performance also showed growth, with operating revenues up 1% to $18.1 billion and net income increasing to $5.0 billion, or $8.18 per diluted share, from $4.7 billion, or $7.75 per diluted share, in the comparable period of 2023. These results underscore Union Pacific's ability to manage costs effectively while growing its top line, driven by strong performance in key commodity groups and enhanced operational efficiency.

Financial Highlights

48 data points
Beta

Revenue

$6.09B

Net Income

$1.67B

27.4% Net Margin

EPS (Diluted)

$2.75

Total Assets

$67.57B

Cash & Equivalents

$947.00M

Free Cash Flow

$1.82B

Financial Statements
Beta
Revenue$6.09B
Operating Expenses$3.67B
Operating Income$2.42B
Interest Expense$314.00M
Net Income$1.67B
EPS (Basic)$2.75
EPS (Diluted)$2.75
Shares Outstanding (Basic)607.60M
Shares Outstanding (Diluted)608.60M

Key Highlights

  • 1Operating revenues increased by 3% to $6.1 billion in Q3 2024, and by 1% to $18.1 billion for the first nine months of 2024, compared to the prior year periods.
  • 2Net income for the third quarter rose to $1.7 billion ($2.75 per diluted share) from $1.5 billion ($2.51 per diluted share) in Q3 2023.
  • 3Year-to-date net income grew to $5.0 billion ($8.18 per diluted share) from $4.7 billion ($7.75 per diluted share) in the comparable 2023 period.
  • 4The operating ratio improved significantly to 60.3% in Q3 2024 from 63.4% in Q3 2023, reflecting enhanced operational efficiency.
  • 5Freight volumes increased by 6% in Q3 2024, driven by international intermodal and grain shipments.
  • 6Cash provided by operating activities increased to $6.7 billion for the first nine months of 2024 from $6.0 billion in the same period of 2023.
  • 7Capital expenditures for the nine months ended September 30, 2024, were $2.53 billion, a slight decrease from $2.58 billion in the prior year, supporting network improvements and growth.

Frequently Asked Questions

Revenue growth in the third quarter of 2024 was primarily driven by a 6% increase in freight volumes, particularly in international intermodal and grain shipments, coupled with core pricing gains. This growth was partially offset by a negative mix (such as a relative increase in lower average revenue per car international intermodal shipments) and lower fuel surcharge revenues.

Union Pacific improved its operating ratio to 60.3% in the third quarter of 2024 from 63.4% in the prior year's quarter. This improvement was attributed to several factors including productivity gains across operations, lower fuel prices, efficient network management, and cost control measures, partially offset by inflation and volume-related costs.

For the full year 2024, Union Pacific expects its capital plan to be approximately $3.4 billion, a decrease from 2023. Investments are focused on supporting growth strategies, hardening infrastructure, asset replacement, and improving safety and resiliency. This includes investments in growth projects, intermodal handling, locomotive fleet modernization, and operational efficiency initiatives.

Union Pacific reported a solid liquidity position as of September 30, 2024, with $947 million in cash and cash equivalents and $2.0 billion in available credit under its revolving credit facility. The company's debt-to-adjusted EBITDA ratio was 2.7x for the trailing twelve months, indicating a strong ability to service its debt. Cash provided by operating activities increased year-over-year, supporting ongoing investments and shareholder returns.