Union Pacific (UNP) Tops Q2 EPS by 12c, Revenues Miss

Union Pacific (NYSE: UNP) reported Q2 EPS of $1.67, $0.12 better than the analyst estimate of $1.55. Revenue for the quarter came in at $4.24 billion versus the consensus estimate of $4.37 billion.

Second Quarter Summary

• Operating revenue of $4.2 billion was down 24 percent in second quarter 2020, compared to second quarter 2019. Second quarter business volumes, as measured by total revenue carloads, decreased 20 percent compared to 2019. Volumes for all three business teams – bulk, industrial, and premium – declined in the quarter due to the deteriorating economic conditions brought on by the COVID-19 pandemic. In addition:
• Quarterly freight revenue declined 24 percent, compared to second quarter 2019, as core pricing gains were offset by lower volumes, negative business mix and decreased fuel surcharge revenue.
• Union Pacific's 61 percent operating ratio increased 1.4 points compared to second quarter 2019.
• Union Pacific recognized a $69 million gain from a real estate sale to the Illinois State Toll Highway Authority.
• The $1.26 per gallon average quarterly diesel fuel price in second quarter 2020 was 43 percent lower than second quarter 2019.
• Union Pacific's first half reportable personal injury rate of 0.83 incidents per 200,000 employee hours improved 5 percent compared to first half 2019.
• Quarterly freight car velocity was 225 daily miles per car, an 11 percent improvement compared to second quarter 2019.
• Quarterly locomotive productivity was 136 GTMs per horsepower day, a 12 percent improvement compared to second quarter 2019.
• Average maximum train length was 8,664 feet, a 13 percent increase compared to second quarter 2019.

2020 Outlook

Although the state of global economy is somewhat uncertain given the lingering impact of the COVID-19 pandemic, Union Pacific currently expects full year 2020 carload volumes to be down around 10 percent or so compared to 2019.

"Our first priority continues to be the health and safety of our employees during the pandemic, as they perform critical service to support economic recovery," Fritz said. "Our ability to be nimble and flexible in adjusting our resources to rapidly changing volumes, while providing a high level service product, demonstrates the strength of our service model. We remain focused on providing our customers with a safe, reliable and efficient service product."

For earnings history and earnings-related data on Union Pacific (UNP) click here.

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