Union Pacific Corp Earnings: Fifth Consecutive Quarter of Double-Digit Growth

S&P 500 (NYSE:SPY) component Union Pacific Corporation (NYSE:UNP) reported net income above Wall Street’s expectations for the fourth quarter. Union Pacific links 23 states in the western two-thirds of the United States through its operating company, Union Pacific Railroad Company.

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Union Pacific Earnings Cheat Sheet for the Fourth Quarter.

Results: Net income for the railroad company rose to $964 million ($1.99 per share) vs. $775 million ($1.56 per share) in the same quarter a year earlier. This marks a rise of 24.4% from the year earlier quarter.

Revenue: Rose 15.8% to $5.11 billion from the year earlier quarter.

Actual vs. Wall St. Expectations: UNP beat the mean analyst estimate of $1.81 per share. Analysts were expecting revenue of $5.05 billion.

Quoting Management: “The dedicated efforts of our employees, combined with the strength of our diverse railroad franchise, drove record fourth quarter results,” said Jim Young, Union Pacific chairman and chief executive officer. “In 2011, we achieved best-ever marks in customer satisfaction and employee safety, invested a record $3.2 billion in capital, and generated record free cash flow of $1.9 billion. Two-thousand-eleven was the most profitable year in Union Pacific’s history, allowing us to reward shareholders with increased financial returns.”

Key Stats:

The company has enjoyed double-digit year-over-year percentage revenue growth for the past five quarters. Over that span, the company has averaged growth of 15.7%, with the biggest boost coming in the fourth quarter of the last fiscal year when revenue rose 17.5% from the year earlier quarter.

The company has now seen net income rise in three straight quarters. In the third quarter, net income rose 16.2% and in the second quarter, the figure rose 10.4%.

The company has now topped analyst estimates for the last three quarters. It beat the mark by 4 cents in the third quarter and by one cent in the second quarter.

Looking Forward: Expectations for the company’s next quarter performance are higher than they were ninety days ago. Over the past three months, the average estimate for the first quarter of the next fiscal year has risen to $1.58 per share from $1.56. Over the past three months, the average estimate for the fiscal year has climbed from $6.47 per to share to $6.55.

Competitors to Watch: Kansas City Southern (NYSE:KSU), CSX Corporation (NYSE:CSX), Norfolk Southern Corp. (NYSE:NSC), Canadian National Railway (NYSE:CNI), Canadian Pacific Railway Ltd. (NYSE:CP), Genesee & Wyoming Inc. (NYSE:GWR), Providence & Worcester Railroad Co. (NASDAQ:PWX) and RailAmerica, Inc. (NYSE:RA).

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(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)


To contact the reporter on this story: Derek Hoffman at staff.writers@wallstcheatsheet.com

To contact the editor responsible for this story: Damien Hoffman at editors@wallstcheatsheet.com