Union Pacific (UNP.US) Q3 misses expectations, revenue from railroad freight business grows 5%

Union Pacific Corporation, a transportation industry leader focused on freight railroad services in the United States, has reported its financial results for the third quarter of 2024. The company's Q3 revenue grew 3% year-on-year to $6.09 billion, slightly below analysts' average estimate of $6.14 billion. Net profit was $1.671 billion, up 9% year-on-year; diluted EPS was $2.75, slightly below analysts' average estimate of $2.78.

The 3% year-on-year growth in revenue was driven mainly by volume growth and core pricing gains, partially offset by a decline in business mix and fuel surcharge revenue. Revenue from railroad freight services, excluding fuel surcharge income, grew 5%, while volume increased 6%.

Operating profit was $2.416 billion, up 11% year-on-year. The operating ratio (Operating Ratio) was 60.3%, up 310 basis points from the same period last year; the lower quarterly fuel prices had a positive 120 basis point impact on the operating ratio.

Looking ahead, the company expects its fourth-quarter performance to be in line with the third quarter but with year-on-year improvement. The company said that its earnings outlook remains positive due to strong service offerings, increasing network efficiency, and stable pricing. The company added that it expects a $1.5 billion stock buyback in 2024. The company maintains its long-term capital allocation strategy unchanged and continues to maintain a capital plan of approximately $3.4 billion.

As of the time of writing, Union Pacific fell nearly 4% before the market opened on Thursday.