Union Pacific’s Q3 2016 Earnings Preview: Lower Shipments And Fuel Surcharge Revenue To Adversely Impact Results

+2.03%
Upside
246
Market
251
Trefis
UNP: Union Pacific logo
UNP
Union Pacific

We expect Union Pacific’s Q3 2016 results to be adversely affected by a decline in revenue, as a result of lower  shipment volumes and fuel surcharge revenue. A steep decline in Union Pacific’s coal shipments, due to weak demand for the commodity from utilities against the backdrop of soft natural gas prices, will drive the overall decline in the company’s shipments. Lower fuel surcharge revenue, as a result of lower fuel prices, will be a secondary source of revenue decline. Though top line headwinds will adversely impact Union Pacific’s EPS, lower volume-related operating expenses, particularly lower fuel-related expenses, will partially offset the impact of lower revenue on earnings.

UNP Q3 2016 Earnings Preview 1

UNP Q3 2016 Earnings Preview 2

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Notes:

1) The purpose of these analyses is to help readers focus on a few important things. We hope such lean communication sparks thinking, and encourages readers to comment and ask questions on the comment section, or email content@trefis.com
2) Figures mentioned are approximate values to help our readers remember the key concepts more intuitively. For precise figures, please refer to our complete analysis for Union Pacific

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