The Omaha-based railroad operator reported Q4 EPS of $1.39, which was $0.06 better than the consensus Wall Street estimate of $1.33. Revenues fell 0.8% from last year, however, to $5.17 billion. Still, that total exceeded analysts’ $5.13 billion view.
Fourth quarter business volumes, which UNP measures by total revenue carloads, fell 3% from 2015 levels. Agricultural product shipments jumped 8%, but the company’s remaining five business groups saw volume declines. Meanwhile, quarterly freight revenue declined 1% from the year-ago quarter. Ag +8%, The weakest segment was coal, which posted a 9% downturn in volumes.
Looking ahead, UNP said it’s “fairly optimistic” for 2017. Rising energy prices and robust agricultural markets, along with improving business and consumer confidence seem to support an environment where it can return to positive volume growth.
The company commented via press release:
“While full-year volumes were down substantially year over year, we did see declines moderate in the fourth quarter,” said Lance Fritz, Union Pacific chairman, president and chief executive officer. “As we worked through the challenges of the year, we remained focused on the strategy we live each day through our six value tracks. Executing on these value tracks enables us to run a safe, efficient, and productive railroad while providing our customers an excellent value proposition.”
Union Pacific Corporation shares rose $1.23 (+1.19%) in premarket trading Thursday. Year-to-date, UNP has gained 0.09%, versus a 1.44% rise in the benchmark S&P 500 index during the same period.
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