Union Pacific Third Quarter on the Horizon

S&P 500 (NYSE:SPY) component Union Pacific (NYSE:UNP) will unveil its latest earnings on Thursday, October 18, 2012. Union Pacific links 23 states in the western two-thirds of the United States through its operating company, Union Pacific Railroad Company.

Union Pacific Earnings Preview Cheat Sheet

Wall St. Earnings Expectations: The average analyst estimate is for net income of $2.19 per share, a rise of 18.4% from the company’s actual earnings for the year-ago quarter. During the past three months, the average estimate has moved down from $2.20. Between one and three months ago, the average estimate moved up. It has dropped from $2.22 during the last month. Analysts are projecting profit to rise by 23.4% versus last year to $8.29.

Past Earnings Performance: The company has beaten estimates the last four quarters and is coming off a quarter where it topped forecasts by 14 cents, reporting profit of $2.10 per share against a mean estimate of net income of $1.96 per share.

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A Look Back: In the second quarter, profit rose 27.6% to $1 billion ($2.10 a share) from $785 million ($1.59 a share) the year earlier, exceeding analyst expectations. Revenue rose 7.5% to $5.22 billion from $4.86 billion.

Stock Price Performance: Between September 14, 2012 and October 12, 2012, the stock price dropped $7.38 (-5.7%), from $128.43 to $121.05. The stock price saw one of its best stretches over the last year between September 5, 2012 and September 14, 2012, when shares rose for eight straight days, increasing 7.7% (+$9.20) over that span. It saw one of its worst periods between September 14, 2012 and September 21, 2012 when shares fell for six straight days, dropping 7.1% (-$9.06) over that span.

Wall St. Revenue Expectations: Analysts predict a rise of 5.5% in revenue from the year-earlier quarter to $5.38 billion.

Key Stats:

After experiencing income increases the last three quarters, the company is hoping to keep the good news coming with this earnings announcement. Net income rose 24.4% in the fourth quarter of the last fiscal year and 35.1% in the first quarter before increasing again in the second quarter.

On the top line, the company is looking to build on four-straight revenue increases heading into this earnings announcement. Revenue rose 15.7% in the third quarter of the last fiscal year, 15.8% in the fourth quarter of the last fiscal year and 13.9% in the first quarter before increasing again in the second quarter.

Analyst Ratings: With 19 analysts rating the stock a buy, none rating it a sell and six rating the stock a hold, there are indications of a bullish stance by analysts.

Balance Sheet Analysis: The company’s current ratio of assets to liabilities came in at 1.01 last quarter. The current ratio is an indication of a firm’s liquidity and ability to meet creditor demands and generally, for every dollar the company owes in the short term, it has that figure available in assets that can be converted to cash in the short term. The company improved this liquidity measure from 0.91 in the first quarter to the last quarter driven in part by an increase in current assets. Current assets increased 11% to $3.96 billion while liabilities rose by 0.4% to $3.92 billion.

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

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