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Union Pacific Shares Hit Yearly Low Amid Earnings Miss and Decline

Mover TrackerThursday, Oct 24, 2024 6:31 pm ET

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On October 24, Union Pacific (UNP) shares fell 4.39%, marking a two-day decline totaling 4.43%. The stock hit its lowest price since July 2024 during intraday trading.

Union Pacific, a major player in the U.S. railroad freight service, recently released its financial results for the third quarter of 2024. The company's revenue grew by 3% year-over-year to $6.09 billion, slightly below analysts' expectations of $6.14 billion. Net profit came in at $1.671 billion, reflecting a 9% increase from the previous year. Diluted earnings per share were reported at $2.75, narrowly missing the forecasted $2.78.

The revenue growth was mainly driven by an increase in volume and core pricing gains. However, this was partially offset by a decrease in business mix and fuel surcharge revenues. Excluding fuel surcharge income, the revenue from railroad freight activities rose by 5%, with freight volumes up by 6%.

Operating profit reached $2.416 billion, representing an 11% rise. The operating ratio improved by 310 basis points from the previous year to 60.3%, benefiting from lower fuel prices which had a positive impact of 120 basis points.

Looking ahead, Union Pacific anticipates that fourth-quarter performance will align with the third quarter, with expectations of further year-over-year improvement. The company highlighted its robust service offerings, ongoing network efficiency enhancements, and solid pricing as key factors supporting positive earnings momentum. Additionally, it projects $1.5 billion in stock buybacks for 2024 and maintains its long-term capital allocation strategy, ensuring a $3.4 billion capital plan.

As of the latest update, Union Pacific shares were down nearly 4% during pre-market trading on Thursday.

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