Union Pacific’s Q1 2017 Earnings Preview: Top Line Growth And Productivity Gains To Boost Earnings

+2.09%
Upside
246
Market
251
Trefis
UNP: Union Pacific logo
UNP
Union Pacific

Union Pacific will release its Q1 2017 earnings result and conduct a conference call with analysts on April 27. [1] We expect the company to report an improvement in its Q1 earnings as a result of a recovery in shipment volumes and productivity gains.

Improving economic conditions in the U.S. have translated into a recovery in rail shipment volumes this year, particularly coal and metals, in stark contrast to the previous one characterized by volume declines. Union Pacific witnessed sharp gains in its coal shipments in Q1 (18% year-over-year) as a result of robust demand for the commodity from utilities amid high natural gas prices. [2] In addition, regulatory intervention discouraging unfair imports and improving demand conditions have translated into higher domestic steel production and a 4% year-over-year increase in Union Pacific’s Metals & Products shipment sub-category. [2] Besides higher shipment volumes, improved demand conditions should result in higher price realizations for Union Pacific in terms of revenue per carload. Higher fuel surcharge revenue as a result of an increase in fuel prices should contribute to the increase in revenue per carload.

In addition to higher revenue, Union Pacific’s productivity improvement initiatives should also help boost the company’s earnings. Union Pacific expects to realize savings from a number of initiatives, particularly the rationalization of headcount and train length. The following table summarizes our expectations from the company’s Q1 results.

Relevant Articles
  1. Should You Pick Union Pacific Stock At $250 After 20% Gains Last Year And Q4 Beat?
  2. Up Over 2x In 2023 Is AMD A Better Pick Over Union Pacific Stock?
  3. Should You Pick Union Pacific Stock After An 18% Fall In Q3 Earnings?
  4. What To Expect From Union Pacific’s Q3 After Stock Up Only 2% This Year?
  5. Should You Pick Union Pacific Stock Over McDonald’s?
  6. Earnings Beat Ahead For Union Pacific Stock?

UNP Q1 2017 Earnings Preview

Have more questions about Union Pacific? See the links below.

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

See More at Trefis | View Interactive Institutional Research (Powered by Trefis)

Get Trefis Technology

Notes:

  1. Union Pacific Corporation Invites You to Join Its 1st Quarter 2017 Earnings Release Broadcast, Union Pacific News Release []
  2. Union Pacific’s Week 13, 2017 Carloadings Report, Union Pacific Website [] []