Union Pacific Corporation ($UNP (-2,13%) ) fell slightly short of expectations in the first quarter of 2025 in terms of both revenue and earnings per share (EPS). EPS amounted to USD 2.70 (expected: USD 2.76) and revenue was USD 6.03 billion (expected: USD 6.10 billion). The share price reacted with a fall of 3.78%.
Key findings
- EPS: USD 2.70 (below expectations of USD 2.76)
- Sales: USD 6.03 billion (below expectations of USD 6.10 billion)
- Share price fell by 3.78 % after the announcement of results
- Improvements in productivity, train length and locomotive utilization
- Freight revenue increased by 1% year-on-year
- Operating cash flow increased by 4% to USD 2.2 billion
Corporate performance
Despite stagnating sales and net profit figures (USD 1.6 billion, unchanged from the previous year), the company made progress in efficiency indicators and operational implementation. The operating cost ratio remained stable at 60.7 %.
Outlook & forecast
Union Pacific is sticking to its medium-term target of increasing EPS at an annual growth rate in the high single-digit to low double-digit range. A share buyback program of USD 4-4.5 billion is planned for 2025.
Management commentary
CEO Jim Vena emphasized the company's strategic focus on operational excellence and sustainable shareholder value creation. EVP Kenny Rocker emphasized the focus on pricing, CFO Jennifer Hamann highlighted the solid start to the year.
Risks & challenges
- Trade conflicts and tariffs
- Volume sensitivity to geopolitical developments
- Interest rate fluctuations and macroeconomic uncertainties
- Maintaining efficiency gains with stagnating sales