S&P 500 (NYSE:SPY) component Union Pacific Corporation (NYSE:UNP) reported its results for the second quarter. Union Pacific Corporation links 23 states in the western two-thirds of the country through its operating company, Union Pacific Railroad Company.
Union Pacific Earnings Cheat Sheet for the Second Quarter
Results: Net income for the railroad company rose to $785 million ($1.59 per share) vs. $711 million ($1.40 per share) in the same quarter a year earlier. This marks a rise of 10.4% from the year earlier quarter.
Revenue: Rose 16.2% to $4.86 billion from the year earlier quarter.
Actual vs. Wall St. Expectations: UNP was about in line with expectations as the mean analyst estimate of $1.58 per share. It beat the average revenue estimate of $4.74 billion.
Quoting Management: “Union Pacific achieved another strong quarter, delivering best-ever quarterly earnings,” said Jim Young, Union Pacific chairman and chief executive officer. “We saw the benefits of our diverse franchise, with volume growth in five of our six commodity groups. We generated record second quarter operating income and cash from operations despite the impact of severe flooding in the Midwest.”
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 18.7%, with the biggest boost coming in the second quarter of the last fiscal year when revenue rose 26.6% from the year earlier quarter.
The company has now seen net income rise in three straight quarters. In the first quarter, net income rose 23.8% and in the fourth quarter of the last fiscal year, the figure rose 40.7%.
Gross margin shrank 2.5 percentage points to 64.9%. The contraction appeared to be driven by increased costs, which rose 25% from the year earlier quarter while revenue rose 16.2%.
The company topped expectations last quarter after falling short of forecasts in the first quarter with net income of $1.29 versus a mean estimate of net income of $1.31 per share.
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).
(Source: Xignite Financials)