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 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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