OMAHA - Union Pacific Corporation (NYSE: NYSE:UNP) reported a slight increase in its first quarter earnings per diluted share, rising to $2.69, a 1% improvement from the $2.67 reported in the same quarter of the previous year.
The railroad operator's performance exceeded analyst expectations, with EPS outpacing the estimate of $2.51 by $0.18. Revenue for the quarter remained flat at $6.03 billion, yet it still managed to surpass the consensus estimate of $5.99 billion.
Following the earnings release, Union Pacific's stock saw a positive market response, climbing 4%.
The company's financial results were bolstered by improved operational efficiency and core pricing gains, which helped drive a 3% increase in operating income, despite the challenges of a tough freight market and typical winter conditions. The freight revenue, excluding fuel surcharge revenue, grew by 4%, although revenue carloads saw a slight decline of 1%. Union Pacific's operating ratio improved by 140 basis points to 60.7%, with lower fuel prices during the quarter impacting the ratio by 60 basis points.
CEO Jim Vena commented on the results, "Our team delivered strong financial results in the first quarter as we navigated a challenging freight market and normal winter conditions. These results build on the momentum we established as we exited 2023 and provide further proof of what’s possible as we strive to be the best in safety, service, and operational excellence."
Looking ahead, Union Pacific provided an outlook for the remainder of 2024, indicating a profitability outlook gaining momentum, with plans to restart share repurchases in the second quarter. However, the company expects volume to be muted due to the loss of international intermodal business, lower coal demand, and soft economic conditions. Despite these challenges, Union Pacific remains committed to its long-term capital allocation strategy and has a capital plan of $3.4 billion.
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