Union Pacific Shares Fall After Lowered Annual Volume Growth Forecast

Union Pacific Shares Fall After Lowered Annual Volume Growth Forecast
  • Union Pacific Corporation UNP posted Q3 FY22 adjusted EPS of $3.19, beating the consensus of $3.08 and better than the $2.57 posted a year ago.
  • Union Pacific included a $114 million charge for a change to prior-period accounting estimates related to new, tentative, and ratified labor agreements.
  • Operating revenue of $6.6 billion was up 18%, driven by higher fuel surcharge revenue, volume growth, and core pricing gains. The consensus estimate for sales is $6.42 billion.
  • Business volumes, as measured by total revenue carloads, were up 3%.
  • Union Pacific's reported operating ratio was 59.9%. Excluding the charge, the adjusted operating ratio of 58.2% deteriorated by 190 basis points. Lower fuel prices positively impacted the operating ratio by 70 basis points.
  • Adjusted operating income of $2.7 billion was up 13%.
  • Guidance: Union Pacific trimmed its full-year volume growth forecast to about 3% from a prior estimate of 4% - 5%.
  • It expects an FY22 operating ratio of around 60%
  • Price Action: UNP shares are down 3.97% at $192.12 during the premarket session on the last check Thursday.

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