Union Pacific Stock Surges: Strong Earnings Trump Light Revenue

Union Pacific Corporation (UNP) shares are trading higher after the company reported mixed fourth-quarter and full-year 2024 earnings on Thursday, January 23. The railroad operator reported EPS of $2.91, surpassing the market's consensus estimate of $2.79, while revenue for the quarter came in slightly under expectations, reaching $6.1 billion against an anticipated $6.15 billion. Despite the revenue setbacks linked to fuel surcharges and business mix, Union Pacific ended the quarter strong, showcasing positive net income growth and operational efficiencies.

MetricQ4 2024Analysts' EstimateQ4 2023Change (YOY)EPS$2.91$2.79$2.717.4%Revenue$6.1 billion$6.15 billion$6.16 billion(0.8%)Net income$1.8 billionN/A$1.7 billion7%Operating ratio58.7%N/A60.9%(2.2 pps)Source: Union Pacific. Note: Analyst consensus estimates for the quarter provided by FactSet. YOY = Year over year. pps = percentage points.

Union Pacific's strong earnings growth, despite light revenue, reflects the company's operational efficiency and cost management strategies. The railroad reported a 7% increase in fourth-quarter profit, with earnings per share of $2.91, up from $2.71 a year ago. This growth was achieved despite a 1% decline in revenue to $6.12 billion, as the company improved its operating ratio to 58.7%, an improvement of 220 basis points. This improvement was driven by strong service and efficient performance, which enabled volume growth, and resulted in fourth-quarter records for operating income and net income. Additionally, the company's workforce productivity increased 6% to 1,118 car miles per employee, further demonstrating its commitment to operational excellence and cost management.

Union Pacific's quarterly freight car velocity improved 1% to 219 daily miles per car, while locomotive productivity slipped by 3% to 136 gross ton-miles (GTMs) per horsepower day. The average fuel price per gallon consumed declined by 24% year over year to $2.41. Union Pacific's quarterly workforce productivity increased 6% to 1,118 car miles per employee, while fuel consumption rate improved 1% to 1.078, measured in gallons of fuel per thousand GTMs.

Union Pacific's full-year 2024 earnings per share (EPS) were $11.07, up 5.96% from $10.45 in 2023. The company's full-year operating ratio improved by 240 basis points to 59.9%, while operating income increased 5% to $2.5 billion. Union Pacific's full-year freight car velocity improved 2% to 208 daily miles per car, while locomotive productivity improved 5% to 135 GTMs per horsepower day. The company's full-year workforce productivity improved 6% to 1,062 car miles per employee, while fuel consumption rate improved 1% to 1.082, measured in gallons of fuel per thousand GTMs.

Union Pacific's 2025 outlook anticipates volume to be impacted by mixed economic conditions, fluctuating coal demand, and challenging year-over-year comparisons in international intermodal. Pricing is expected to drive improvements in the operating ratio, with earnings per share growth projected to reach high-single to low-double digits over the next three years. The company reaffirms its long-term strategy with a $3.4 billion capital plan, $4.0–$4.5 billion in share repurchases, and a focus on industry-leading efficiency and returns.



Union Pacific's strong earnings growth, despite light revenue, demonstrates the company's ability to manage costs and improve operational efficiency. The railroad's focus on safety, service, and operational excellence has produced industry-leading financial results and is expected to drive high-single to low-double-digit earnings per share growth over the next three years. Union Pacific's commitment to capital expenditures and share repurchases, along with its strategic planning, positions the company to maintain its competitive position and generate value for shareholders.