Union Pacific Corporation (UPN) shares have tumbled despite the company’s earnings exceeding analysts’ expectations in the fourth quarter.
The Omaha, Nebraska-based company posted adjusted earnings of $2.36 per share in the fourth quarter, compared to adjusted earnings of $2.02 per share reported a year ago. Sales in the quarter decreased 1 percent to $5.1 billion from last year.
Analysts were forecasting $2.29 earnings per share for sales of $5.09 billion.
The company issued upside guidance when it expected revenues of $5.06 billion on Jan. 8, but later revised it to $5.1 billion.
This excellent result is a reflection of our franchise’s true potential since we were able to leverage all three levers of profitability simultaneously — volume growth, efficiency, and pricing — to surpass expectations, stated CEO Lance Fritz.
Railway giant did not provide specific forecasts for 2021, instead stating that improved service offerings would boost prices while still helping the railroad grow its share of the freight transportation market. Union Pacific is the largest railroad company in the United States, with 32,340 route miles connecting the Pacific and Gulf coasts and the Great Lakes.
Fritz stated that we have never been more confident about our ability to enhance the value for our stakeholders.
In the fourth quarter, the company repurchased almost 4 million shares of its stock for an estimated cost of $749 million.
In the fourth quarter, bulk and premium shipping revenues increased by 1% and 5%, respectively, though commercial shipping numbers dropped by 7% as the sector struggles to cope with the effects of the coronavirus pandemic and resulting economic lockdowns.
On January 15, 2021, Raymond James rated UNP with a Strong-Buy rating. The price target has been raised to $250.00 from $220.00. The stock has received 3 buy ratings, 0 sell ratings, and 3 hold ratings over the last 30 days.
At the end of Thursday’s trading, shares of Union Pacific Corporation (UPN) had fallen -4.71 percent to $207.90.