Union Pacific Corporation’s UNP fourth-quarter 2024 earnings of $2.91 per share beat the Zacks Consensus Estimate of $2.78 per share. The bottom line improved 7.4% on a year-over-year basis. The year-over-year improvement was due to strong operational efficiency and favorable pricing.
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However, operating revenues of $6.12 billion marginally lagged the Zacks Consensus Estimate of $6.15 billion. The top line declined 0.6% on a year-over-year basis due to lower fuel surcharge revenues, an unfavorable business mix and lower other revenues.
Union Pacific Corporation Price, Consensus and EPS Surprise
Union Pacific Corporation price-consensus-eps-surprise-chart | Union Pacific Corporation Quote
Freight revenues, accounting for 94.6% of the top line, decreased 0.2% to $5.79 billion. The actual figure surpassed our estimate of $5.71 billion. Other revenues decreased 7% to $332 million in the fourth quarter of 2024. Business volumes, measured by total revenue carloads, increased 5% year over year.
The operating income was up 5% year over year at $2.5 billion.
Total operating expenses of $3.6 billion declined 4% year over year. Fuel expenses plunged 23%. Expenses on purchased services and materials fell 4%, and other cost items declined 22% year over year.
The operating ratio (operating expenses as a percentage of revenues) in the final quarter of 2024 improved 220 basis points year over year to 58.7%.
UNP’s Segmental Highlights
Bulk (Grain & grain products, Fertilizer, Food & refrigerated, Coal & renewables) freight revenues were $1.86 billion, which decreased 4% on a year-over-year basis. However, we had projected the metric to fall 8.5% from the year-ago levels. Segmental revenue carloads declined 4% year over year.
Industrial freight revenues totaled $2.09 billion, up 1% year over year. Segmental revenue carloads remained flat at $555 million year over year.
Freight revenues in the Premium division were $1.83 billion, up 3% year over year. However, we had expected the metric to increase 3.5% compared with the year-ago reported figure. Premium revenue carloads improved 13% year over year.
UNP’s Liquidity
Union Pacific exited the fourth quarter of 2024 with cash and cash equivalents of $1.02 billion compared with $1.06 billion in the fourth quarter of 2023. Debt (due after a year) decreased to $29.77 billion in the December-end quarter from $31.16 billion at 2023’s end.
Currently, Union Pacific carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
UNP’s Outlook
Union Pacific expects the full-year 2025 volume to be impacted by a mixed economic backdrop, coal demand fluctuations and challenging year-over-year international intermodal comparisons. Pricing gains are expected to positively affect the operating ratio.
Earnings per share growth is aligned with the company's three-year CAGR target of high-single to low-double digits. Management also anticipates maintaining its industry-leading operating ratio and return on invested capital.
Union Pacific's long-term capital allocation strategy remains unchanged, with a capital plan of $3.4 billion and share repurchases ranging from $4 to $4.5 billion.
Q4 Performances of Other Transportation Companies
Delta Air Lines DAL reported fourth-quarter 2024 earnings (excluding 56 cents from non-recurring items) of $1.85 per share, which surpassed the Zacks Consensus Estimate of $1.76. Earnings increased 44.5% on a year-over-year basis due to low fuel costs.
DAL’s revenues of $15.56 billion beat the Zacks Consensus Estimate of $14.99 billion and increased 9.4% on a year-over-year basis, driven by strong holiday travel demand. Adjusted operating revenues (excluding third-party refinery sales) totaled $14.44 billion, up 5.7% year over year. Passenger revenues, which accounted for 82.4% of total revenues, increased 5% year over year to $12.82 billion.
J.B. Hunt Transport Services JBHT reported fourth-quarter 2024 earnings per share of $1.53, which fell short of the Zacks Consensus Estimate of $1.62. However, the bottom line increased 4.1% on a year-over-year basis.
JBHT’s total operating revenues of $3.15 billion narrowly beat the Zacks Consensus Estimate of $3.13 billion but declined 4.8% year over year. The decrease was mainly due to lower fuel surcharge revenues and yield pressure in its Intermodal segment.
JBHT’s fourth-quarter 2024 operating revenues of $2.78 billion, excluding fuel surcharge revenues, decreased 2% from the year-ago reported quarter. Total operating income for the reported quarter increased 2% year over year to $207 million.
United Airlines Holdings UAL reported solid fourth-quarter 2024 results, with both earnings and revenues surpassing the Zacks Consensus Estimate.
Quarterly earnings per share (excluding 31 cents from non-recurring items) of $3.26 surpassed the Zacks Consensus Estimate of $3.01. The bottom line increased 63% on a year-over-year basis. The reported figure exceeded the company’s guided range of $2.50-$3.00.
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