How Does Union Pacific’s Revenue And Key Operating Metrics Compare With That of Norfolk Southern?

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Union Pacific Corporation
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Union Pacific Corporation (NYSE: UNP) and Norfolk Southern (NYSE: NSC) are both railroad companies in the U.S., engaged in the transportation of various commodities, including industrial and coal among others. While both Union Pacific and Norfolk Southern have similar revenue trends, Union Pacific’s profitability is slightly higher than that of Norfolk Southern. In this note we compare both the companies’ revenues and key operating metrics. You can look at our interactive dashboard analysis ~ Union Pacific vs. Norfolk Southern: How Have Revenues & Key Operating Metrics Changed Over Recent Years? ~ for more details. In addition, you can see more of our data for industrial companies here.

How Have Total Revenues For Union Pacific And Norfolk Southern Trended Over The Last 5 Years?

  • Union Pacific and Norfolk Southern are both engaged primarily in freight transportation in the United States.
  • Union Pacific’s revenues have declined from $24.0 billion in 2014 to $22.8 billion in 2018, primarily due to a lower Energy freight revenues. For UNP, coal falls under its Energy segment.
  • Norfolk Southern’s revenues have declined slightly from $11.6 billion in 2014 to $11.5 billion in 2018, also due to lower coal freight revenues.

Union Pacific’s Revenues Have Declined At A Slightly Higher Pace Than That of Norfolk Southern

  • Both Union Pacific and Norfolk Southern saw a modest decline in revenues between 2014 and 2018.
  • Union Pacific’s revenues declined at an average annual rate of -1.0% , while that of Norfolk Southern was less than -0.1%.

Union Pacific’s Volume Shipped As Well As ARPU Has Been Higher Than That of Norfolk Southern.

  • Union Pacific’s total carloads shipped declined from 9.6 million in 2014 to 8.9 million in 2018.
  • Norfolk Southern’s total carloads grew slightly from 7.7 million in 2014 to 7.9 million in 2018.
  • Union Pacific’s Carloads As of 2018:
    • Agriculture: 1.12 Mil (13% of total)
    • Energy: 1.65 Mil (18% of total)
    • Industrial: 1.75 Mil (20% of total)
    • Premium: 4.38 Mil (49% of total)
  • Norfolk Southern’s Carloads As of 2018:
    • Merchandise: 2.52 Mil (32% of total)
    • Coal: 1.03 Mil (13% of total)
    • Intermodal: 4.38 Mil (55% of total)

  • Union Pacific’s average revenue per carload has been trending higher in the recent years. It grew from $2,344 in 2014 to $2,563 in 2018.
  • Norfolk Southern’s average revenue per carload has declined from $1,514 in 2014 to $1,445 in 2018.
  • Note that this difference in Average Revenue Per Carload between the two companies can be attributed to higher portion of Intermodal shipments in total carloads for Norfolk Southern. Intermodal carloads usually garner lower ARPU.

Average Revenue Per Employee Has Been A Little Higher For Union Pacific.

  • Average Revenue Per Employee (ARPE) has fluctuated in the past for both the companies.
  • Union Pacific’s ARPE declined from $508K in 2014 to $465K in 2016, but grew to $544K in 2018, led by a reduction in the workforce.
  • Similarly, Norfolk Southern’s ARPE declined from $394K in 2014 to $353K in 2016, but grew thereafter to $430 in 2018, also led by reduction in the workforce.

Union Pacific’s Revenue Ton Miles Has Been Higher Than That of Norfolk Southern.

  • Revenue ton mile refers to product of weight in tons of the shipment being transported, and the number of miles that it is transported.
  • Union Pacific’s revenue ton miles declined from 550 billion in 2014 to 474 billion in 2018.
  • Norfolk Southern’s revenue ton miles saw a modest growth from 205 billion in 2014 to 207 billion in 2018.

Union Pacific’s EBIT Margin And Adjusted Net Income Margin Have Been Higher Than That of Norfolk Southern

  • Looking at EBIT margins, Union Pacific beats Norfolk Southern. Union Pacific’s EBIT margin has grown from 36.5% in 2014 to 37.3% in 2018.
  • This compares with Norfolk Southern’s EBIT margin, which grew from 30.8% in 2014 to 34.6% in 2018.

  • Union Pacific’s net income margin grew from 21.6% in 2014 to 26.1% in 2018.
  • This compares with Norfolk Southern’s net income margin of 17.2% in 2014, and 23.3% in 2018.

 

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