- First quarter earnings per diluted share of $2.69, up 1%
- First quarter operating income up 3%
- First quarter net income up 1%
Union Pacific Corporation (NYSE: UNP) today reported 2024 first
quarter net income of $1.6 billion, or $2.69 per diluted share.
This compares to 2023 first quarter net income of $1.6 billion, or
$2.67 per diluted share.
“Our team delivered strong financial results in the first
quarter as we navigated a challenging freight market and normal
winter conditions,” said Jim Vena, Union Pacific Chief Executive
Officer. “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. This is a great start to the year, but we understand
there’s work to be done to achieve our goals and meet our
stakeholders’ expectations.”
First Quarter Summary: 2024 vs. 2023
Financial Results: Improved Operational Efficiency and Core
Pricing Gains Drive Increase in Operating Income; First Quarter
Records for Operating Income and Net Income
- Operating revenue of $6.0 billion was flat driven by core
pricing gains and business mix offset by reduced fuel surcharge
revenue and lower volume.
- Freight revenue excluding fuel surcharge revenue grew 4% as
revenue carloads declined 1%.
- Operating ratio was 60.7%, an improvement of 140 basis points.
Lower fuel prices during the quarter negatively impacted the
operating ratio 60 basis points.
- Operating income of $2.4 billion was up 3%.
Operating Performance: Improvement Across Safety, Service,
and Operational Excellence; First Quarter Record for Fuel
Consumption Rate
- Union Pacific’s reportable personal injury and reportable
derailment rates both improved.
- Quarterly freight car velocity was 203 daily miles per car, a
4% improvement.
- Quarterly locomotive productivity was 135 gross ton-miles
(GTMs) per horsepower day, a 10% improvement.
- Average maximum train length was 9,287 feet, a 1%
increase.
- Quarterly workforce productivity improved 1% to 1,000 car miles
per employee.
- Fuel consumption rate of 1.115, measured in gallons of fuel per
thousand GTMs, improved 1%.
2024 Outlook
Updated
- Profitability outlook gaining momentum with strong service
product, improving network efficiency, and solid pricing
- Restarting share repurchases in second quarter
Affirmed
- Volume outlook muted by international intermodal business loss,
lower coal demand, and soft economic conditions
- Pricing dollars in excess of inflation dollars
- No change to long-term capital allocation strategy
- Capital plan of $3.4 billion
First Quarter 2024 Earnings Conference Call
Union Pacific will webcast its first quarter 2024 earnings
release presentation live at www.up.com/investor and via
teleconference on Thursday, April 25, 2024, at 8:45 a.m. Eastern
Time. Participants may join the conference call by dialing
877-407-8293 (or for international participants, 201-689-8349).
ABOUT UNION PACIFIC
Union Pacific (NYSE: UNP) delivers the goods families and
businesses use every day with safe, reliable, and efficient
service. Operating in 23 western states, the company connects its
customers and communities to the global economy. Trains are the
most environmentally responsible way to move freight, helping Union
Pacific protect future generations. More information about Union
Pacific is available at www.up.com.
Supplemental financial information is attached.
This news release and related materials contain statements about
the Company’s future that are not statements of historical fact,
including specifically the statements regarding the potential
impacts of public health crises, including pandemics, epidemics and
the outbreak of other contagious diseases, such as the coronavirus
and its variant strains (COVID); the Russia-Ukraine and
Israel-Hamas wars and other geopolitical tensions in the middle
east, and any impacts on our business operations, financial
results, liquidity, and financial position, and on the world
economy (including customers, employees, and supply chains),
including as a result of fluctuations in volume and carloadings;
expectations as to general macroeconomic conditions, including
slowdowns and recessions, domestically or internationally, and
volatility in interest rates and fuel prices; closing of customer
manufacturing, distribution, or production facilities; expectations
as to operational or service improvements; expectations as to
hiring challenges; availability of employees; expectations
regarding the effectiveness of steps taken or to be taken to
improve operations, service, infrastructure improvements, and
transportation plan modifications; expectations as to cost savings,
revenue growth, and earnings; the time by which goals, targets, or
objectives will be achieved; projections, predictions,
expectations, estimates, or forecasts as to business, financial,
and operational results, future economic performance, and general
economic conditions; proposed new products and services; estimates
of costs relating to environmental remediation and restoration;
estimates and expectations regarding tax matters; expectations that
claims, litigation, environmental costs, commitments, contingent
liabilities, labor negotiations or agreements, cyberattacks or
other matters. These statements are, or will be, forward-looking
statements within the meaning of Section 27A of the Securities Act
of 1933 and Section 21E of the Securities Exchange Act of 1934.
Forward-looking statements also generally include, without
limitation, information, or statements regarding: projections,
predictions, expectations, estimates, or forecasts as to the
Company’s and its subsidiaries’ business, financial, and
operational results, and future economic performance; and
management’s beliefs, expectations, goals, and objectives and other
similar expressions concerning matters that are not historical
facts.
Forward-looking statements should not be read as a guarantee of
future performance or results and will not necessarily be accurate
indications of the times that, or by which, such performance or
results will be achieved. Forward-looking information, including
expectations regarding operational and financial improvements and
the Company’s future performance or results are subject to risks
and uncertainties that could cause actual performance or results to
differ materially from those expressed in the statement. Important
factors, including risk factors, could affect the Company’s and its
subsidiaries’ future results and could cause those results or other
outcomes to differ materially from those expressed or implied in
the forward-looking statements. Information regarding risk factors
and other cautionary information are available in the Company’s
Annual Report on Form 10-K for 2023, which was filed with the SEC
on February 9, 2024. The Company updates information regarding risk
factors if circumstances require such updates in its periodic
reports on Form 10-Q and its subsequent Annual Reports on Form 10-K
(or such other reports that may be filed with the SEC).
Forward-looking statements speak only as of, and are based only
upon information available on, the date the statements were made.
The Company assumes no obligation to update forward-looking
information to reflect actual results, changes in assumptions, or
changes in other factors affecting forward-looking information. If
the Company does update one or more forward-looking statements, no
inference should be drawn that the Company will make additional
updates with respect thereto or with respect to other
forward-looking statements. References to the Company’s website are
provided for convenience and, therefore, information on or
available through the website is not, and should not be deemed to
be, incorporated by reference herein.
UNION PACIFIC CORPORATION AND
SUBSIDIARY COMPANIES
Condensed Consolidated Statements of
Income (unaudited)
Millions, Except Per Share Amounts and
Percentages, For the Periods Ended March
31,
2024
2023
%
Operating Revenues
Freight revenues
$
5,616
$
5,656
(1
)%
Other revenues
415
400
4
Total operating revenues
6,031
6,056
-
Operating Expenses
Compensation and benefits
1,223
1,179
4
Fuel
658
766
(14
)
Purchased services and materials
613
653
(6
)
Depreciation
594
572
4
Equipment and other rents
216
235
(8
)
Other
355
357
(1
)
Total operating expenses
3,659
3,762
(3
)
Operating Income
2,372
2,294
3
Other income, net
92
184
(50
)
Interest expense
(324
)
(336
)
(4
)
Income before income taxes
2,140
2,142
-
Income tax expense
(499
)
(512
)
(3
)
Net Income
$
1,641
$
1,630
1
%
Share and Per Share
Earnings per share - basic
$
2.69
$
2.67
1
%
Earnings per share - diluted
$
2.69
$
2.67
1
Weighted average number of shares -
basic
609.2
610.6
-
Weighted average number of shares -
diluted
610.2
611.5
-
Dividends declared per share
$
1.30
$
1.30
-
Operating Ratio
60.7
%
62.1
%
(1.4
) pts
Effective Tax Rate
23.3
%
23.9
%
(0.6
) pts
UNION PACIFIC CORPORATION AND
SUBSIDIARY COMPANIES
Freight Revenues Statistics
(unaudited)
For the Periods Ended March 31,
2024
2023
%
Freight Revenues (Millions)
Grain & grain products
$
943
$
943
-
%
Fertilizer
201
186
8
Food & refrigerated
285
263
8
Coal & renewables
388
505
(23
)
Bulk
1,817
1,897
(4
)
Industrial chemicals & plastics
572
536
7
Metals & minerals
515
536
(4
)
Forest products
338
332
2
Energy & specialized markets
679
613
11
Industrial
2,104
2,017
4
Automotive
611
587
4
Intermodal
1,084
1,155
(6
)
Premium
1,695
1,742
(3
)
Total
$
5,616
$
5,656
(1
)%
Revenue Carloads (Thousands)
Grain & grain products
210
202
4
%
Fertilizer
47
45
4
Food & refrigerated
46
44
5
Coal & renewables
177
216
(18
)
Bulk
480
507
(5
)
Industrial chemicals & plastics
164
157
4
Metals & minerals
170
188
(10
)
Forest products
53
52
2
Energy & specialized markets
154
139
11
Industrial
541
536
1
Automotive
207
200
4
Intermodal [a]
739
734
1
Premium
946
934
1
Total
1,967
1,977
(1
)%
Average Revenue per Car
Grain & grain products
$
4,494
$
4,668
(4
)%
Fertilizer
4,271
4,135
3
Food & refrigerated
6,231
5,963
4
Coal & renewables
2,189
2,341
(6
)
Bulk
3,787
3,743
1
Industrial chemicals & plastics
3,486
3,402
2
Metals & minerals
3,030
2,853
6
Forest products
6,297
6,384
(1
)
Energy & specialized markets
4,416
4,408
-
Industrial
3,886
3,760
3
Automotive
2,947
2,944
-
Intermodal [a]
1,468
1,573
(7
)
Premium
1,792
1,866
(4
)
Average
$
2,855
$
2,861
-
%
[a]
For intermodal shipments each container or
trailer equals one carload.
UNION PACIFIC CORPORATION AND
SUBSIDIARY COMPANIES
Condensed Consolidated Statements of
Financial Position (unaudited)
Mar. 31,
Dec. 31,
Millions, Except Percentages
2024
2023
Assets
Cash and cash equivalents
$
925
$
1,055
Short-term investments
20
16
Other current assets
3,249
3,077
Investments
2,651
2,605
Properties, net
57,590
57,398
Operating lease assets
1,453
1,643
Other assets
1,378
1,338
Total assets
$
67,266
$
67,132
Liabilities and Common Shareholders'
Equity
Debt due within one year
$
733
$
1,423
Other current liabilities
3,801
3,683
Debt due after one year
31,195
31,156
Operating lease liabilities
1,016
1,245
Deferred income taxes
13,146
13,123
Other long-term liabilities
1,710
1,714
Total liabilities
51,601
52,344
Total common shareholders' equity
15,665
14,788
Total liabilities and common shareholders'
equity
$
67,266
$
67,132
UNION PACIFIC CORPORATION AND
SUBSIDIARY COMPANIES
Condensed Consolidated Statements of Cash
Flows (unaudited)
Millions, for the Periods Ended March
31,
2024
2023
Operating Activities
Net income
$
1,641
$
1,630
Depreciation
594
572
Deferred and other income taxes
23
52
Other - net
(136
)
(414
)
Cash provided by operating activities
2,122
1,840
Investing Activities
Capital investments*
(797
)
(772
)
Other - net
(5
)
(33
)
Cash used in investing activities
(802
)
(805
)
Financing Activities
Debt repaid
(1,358
)
(647
)
Dividends paid
(795
)
(795
)
Debt issued
400
1,199
Share repurchase programs
-
(575
)
Other - net
302
(109
)
Cash used in financing activities
(1,451
)
(927
)
Net change in cash, cash equivalents, and
restricted cash
(131
)
108
Cash, cash equivalents, and restricted
cash at beginning of year
1,074
987
Cash, cash equivalents, and restricted
cash at end of period
$
943
$
1,095
Free Cash Flow**
Cash provided by operating activities
$
2,122
$
1,840
Cash used in investing activities
(802
)
(805
)
Dividends paid
(795
)
(795
)
Free cash flow
$
525
$
240
*
Capital investments include locomotive and
freight car early lease buyouts of $96 million in 2024 and $8
million in 2023.
**
Free cash flow is a non-GAAP measure;
however, we believe this measure is important to management and
investors in evaluating our financial performance and measures our
ability to generate cash without additional external financing.
UNION PACIFIC CORPORATION AND
SUBSIDIARY COMPANIES
Operating and Performance Statistics
(unaudited)
For the Periods Ended March 31,
2024
2023
%
Operating/Performance
Statistics
Freight car velocity (daily miles per
car)*
203
196
4
%
Average train speed (miles per hour)*
24.1
24.1
-
Average terminal dwell time (hours)*
23.5
24.0
(2
)
Locomotive productivity (GTMs per
horsepower day)
135
123
10
Gross ton-miles (GTMs) (millions)
206,029
206,648
-
Train length (feet)
9,287
9,159
1
Intermodal service performance index
(%)
95
81
14
pts
Manifest/Automotive service performance
index (%)
87
80
7
pts
Intermodal car trip plan compliance
(%)**
85
72
13
pts
Manifest/Automotive car trip plan
compliance (%)**
66
61
5
pts
Workforce productivity (car miles per
employee)
1,000
989
1
Total employees (average)
31,052
31,532
(2
)
Locomotive Fuel Statistics
Average fuel price per gallon consumed
$
2.81
$
3.22
(13
)%
Fuel consumed in gallons (millions)
230
232
(1
)
Fuel consumption rate***
1.115
1.123
(1
)
Revenue Ton-Miles (Millions)
Grain & grain products
20,649
20,044
3
%
Fertilizer
3,287
3,136
5
Food & refrigerated
4,917
4,543
8
Coal & renewables
18,883
22,497
(16
)
Bulk
47,736
50,220
(5
)
Industrial chemicals & plastics
7,427
7,091
5
Metals & minerals
8,065
8,947
(10
)
Forest products
5,580
5,549
1
Energy & specialized markets
10,586
9,499
11
Industrial
31,658
31,086
2
Automotive
4,536
4,400
3
Intermodal
17,335
18,120
(4
)
Premium
21,871
22,520
(3
)
Total
101,265
103,826
(2
)%
*
Surface Transportation Board (STB)
reported performance measures.
**
Methodology used to report is not
comparable with the reporting to the STB under docket number EP
770.
***
Fuel consumption is computed as follows:
gallons of fuel consumed divided by gross ton-miles in
thousands.
UNION PACIFIC CORPORATION AND
SUBSIDIARY COMPANIES
Non-GAAP Measures Reconciliation to GAAP
(unaudited)
Debt / Net Income
Millions, Except Ratios
Mar. 31,
Dec. 31,
for the Trailing Twelve Months Ended
[a]
2024
2023
Debt
$
31,928
$
32,579
Net income
6,390
6,379
Debt / net income
5.0
5.1
Adjusted Debt / Adjusted
EBITDA*
Millions, Except Ratios
Mar. 31,
Dec. 31,
for the Trailing Twelve Months Ended
[a]
2024
2023
Net income
$
6,390
$
6,379
Add:
Income tax expense
1,841
1,854
Depreciation
2,340
2,318
Interest expense
1,328
1,340
EBITDA
$
11,899
$
11,891
Adjustments:
Other income, net
(399
)
(491
)
Interest on operating lease liabilities
[b]
48
58
Adjusted EBITDA
$
11,548
$
11,458
Debt
$
31,928
$
32,579
Operating lease liabilities
1,338
1,600
Adjusted debt
$
33,266
$
34,179
Adjusted debt / adjusted EBITDA
2.9
3.0
[a]
The trailing twelve months income
statement information ended March 31, 2024, is recalculated by
taking the twelve months ended December 31, 2023, subtracting the
three months ended March 31, 2023, and adding the three months
ended March 31, 2024.
[b]
Represents the hypothetical interest
expense we would incur (using the incremental borrowing rate) if
the property under our operating leases were owned or accounted for
as finance leases.
*
Adjusted debt (total debt plus operating
lease liabilities plus after-tax unfunded pension and OPEB (other
post retirement benefit) obligations) to adjusted EBITDA (earnings
before interest, taxes, depreciation, amortization, and adjustments
for other income and interest on present value of operating leases)
is considered a non-GAAP financial measure by SEC Regulation G and
Item 10 of SEC Regulation S-K and may not be defined and calculated
by other companies in the same manner. We believe this measure is
important to management and investors in evaluating the Company’s
ability to sustain given debt levels (including leases) with the
cash generated from operations. In addition, a comparable measure
is used by rating agencies when reviewing the Company’s credit
rating. Adjusted debt to adjusted EBITDA should be considered in
addition to, rather than as a substitute for, other information
provided in accordance with GAAP. The most comparable GAAP measure
is debt to net income ratio. The tables above provide
reconciliations from net income to adjusted EBITDA, debt to
adjusted debt, and debt to net income to adjusted debt to adjusted
EBITDA. At both March 31, 2024, and December 31, 2023, the
incremental borrowing rate on operating leases was 3.6%. Pension
and OPEB were funded at March 31, 2024, and December 31, 2023.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240425920104/en/
Union Pacific Investor contact: Brad Stock at
402-544-4227 or bkstock@up.com Union Pacific Media contact:
Clarissa Beyah at 402-957-4793 or cbeyah@up.com
Union Pacific (NYSE:UNP)
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