Union Pacific Corp (NYSE:UNP) stock rose 2.09% (As on July 26, 11:11:29 AM UTC-4, Source: Google Finance) after the company posted mixed result for the second quarter of FY 24 as strong pricing and increased volumes more than offset reduced fuel surcharge and business-mix headwinds. The bulk segment generated $1.7 billion in revenue, down 2% year over year. The drop-off was entirely due to a 21% decline in the coal and renewables category. However, most of that slump was offset by growth in fertilizers (11%), food and refrigerated goods (9%), and grain and grain products (1%) — that last being by far the largest category in the segment. Industrial revenue rose 2% to $2.1 billion, driven by a 9% rise in industrial chemicals and plastics, and a 4% increase in energy and specialized markets. The premium segment grew by 4% to $1.8 billion, with automotive revenue up 5% and intermodal up 3%. Union Pacific’s net income rose 7% to $1.67 billion, in the quarter ended June 30, from a year earlier.
UNP in the second quarter of FY 24 has reported the adjusted earnings per share of $2.74, beating the analysts’ estimates for the adjusted earnings per share of $2.70, according to Zacks Investment Research. The company had reported the adjusted revenue growth of 1 percent to $6.01 billion in the second quarter of FY 24, missing the analysts’ estimates for revenue of $6.06 billion. Union Pacific reported an operating ratio of 60% for the second quarter, an improvement from last year’s 63%. Operating income increased 9% to $2.4 billion, driven by core pricing gains, operating efficiency, and intermodal equipment sale.
Moreover, Union Pacific reported second-quarter freight car velocity of 201 daily miles per car, flat YoY, and locomotive productivity of 134 gross ton-miles (GTMs) per horsepower day, a 6% improvement. Average fuel price per gallon consumed declined by 5% Y/Y to $2.73. Union Pacific’s quarterly workforce productivity improved by 5 % to 1,031 car miles per employee. Union Pacific’s operating cash flow year-to-date totaled $4.03 billion, up from $3.86 billion a year ago. Free cash flow was $853 million.
Union Pacific anticipates an uncertain second-half volume outlook due to economic indicators and coal demand but remains optimistic about profitability with strong service, improved network efficiency, and solid pricing.
The company plans to repurchase approximately $1.5 billion in shares in 2024. The company anticipates a capital plan of $3.4 billion.