Union Pacific (UNP) earnings report for the 4th quarter of their 2021 fiscal year
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Category: Union Pacific (UNP)
Date: 24 January 2022 Stock Price of Union Pacific: $246.33 Market Capital of Union Pacific: $158.4 billion We take a look at freight rail transport company, Union Pacific's earnings report for the 4th quarter of their 2021 fiscal year. For the 4th quarter the group reported revenues of $5.7 billion and net income of $1.7 billion
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The Union Pacific team concluded its most profitable year ever in 2021. We produced double digit fourth quarter revenue growth by leveraging our great rail franchise to generate positive business mix and core pricing gains, despite ongoing global supply chain challenges that impacted volumes - Lance Fritz, Union Pacific chairman, president and chief executive officer "
About Union Pacific
Union Pacific Corporation (NYSE:UNP) is one of America's leading transportation companies. Its principal operating company, Union Pacific Railroad, is North America's premier railroad franchise, covering 23 states across the western two-thirds of the United States. The railroad's diversified business mix is classified into its Agricultural Products, Energy, Industrial and Premium business groups. Union Pacific serves many of the fastest-growing U.S. population centers, operates from all major West Coast and Gulf Coast ports to eastern gateways, connects with Canada's rail systems and is the only railroad serving all six major Mexico gateways. Union Pacific provides value to its roughly 10,000 customers by delivering products in a safe, reliable, fuel efficient and environmentally responsible manner
VISION:
Building America.
Our vision symbolizes the Union Pacific experience for all the people whose lives we touch. It connects the importance of UP’s rail transportation to America's economy, honors the generations that preceded us and is the promise for the generations that will follow us.
MISSION:
The Men and Women of Union Pacific Are Dedicated to Serve.
Union Pacific works for the good of our customers, shareholders, communities and one another. Our commitment defines us and drives the economic strength of our company and our country.
VALUES:
Passion for Performance.
Our passion, concentration and determination will drive our safety, customer satisfaction and quality results.
High Ethical Standards.
Our reputation will always be a source of pride for our employees and a bond with our customers, shareholders and communities.
Work as a Team.
We are all part of the same team, and working together to reach our common goals is one of our strengths. Communication and respect are the foundation of great teamwork.
Union Pacific Railroad Fast Facts(For Full Year 2018)
VISION:
Building America.
Our vision symbolizes the Union Pacific experience for all the people whose lives we touch. It connects the importance of UP’s rail transportation to America's economy, honors the generations that preceded us and is the promise for the generations that will follow us.
MISSION:
The Men and Women of Union Pacific Are Dedicated to Serve.
Union Pacific works for the good of our customers, shareholders, communities and one another. Our commitment defines us and drives the economic strength of our company and our country.
VALUES:
Passion for Performance.
Our passion, concentration and determination will drive our safety, customer satisfaction and quality results.
High Ethical Standards.
Our reputation will always be a source of pride for our employees and a bond with our customers, shareholders and communities.
Work as a Team.
We are all part of the same team, and working together to reach our common goals is one of our strengths. Communication and respect are the foundation of great teamwork.
Union Pacific Railroad Fast Facts(For Full Year 2018)
- Route Miles: 32,200
- Employees: 42,000
- Annual Payroll: $4.3 billion
- Capital Spending :$3.2 billion
- Capital Spending 2009-2018: $34 billion
- Locomotives: 8,300
- Customers: 10,000
Overview of Union Pacific's 4th quarter 2021 earnings
Fourth Quarter 2021 Compared to Adjusted Fourth Quarter 2020*
Operating Performance: Network Recovery Efforts Slowed by COVID Impacts to Crew AvailabilityFourth Quarter 2021 Compared to Fourth Quarter 2020
- Operating revenue of $5.7 billion was up 12% driven by higher fuel surcharge revenue, a positive business mix, and core pricing gains, partially offset by lower volumes.
- Business volumes, as measured by total revenue carloads, were down 4%.
- Union Pacific’s 57.4% operating ratio deteriorated 180 basis points. Higher fuel prices negatively impacted the operating ratio 100 basis points.
- Operating Income of $2.4 billion was up 7%.
- The company repurchased 5.8 million shares in fourth quarter 2021 at an aggregate cost of $1.4 billion.
Operating Performance: Network Recovery Efforts Slowed by COVID Impacts to Crew AvailabilityFourth Quarter 2021 Compared to Fourth Quarter 2020
- Quarterly freight car velocity of 197 daily miles per car, a 12% decline.
- Quarterly locomotive productivity was 129 gross ton-miles (GTMs) per horsepower day, a 9% decline.
- Average maximum train length was 9,319 feet, a 2% increase.
- Quarterly workforce productivity was 1,046 car miles per employee, a 1% improvement
- Fuel consumption rate, measured in gallons of fuel per thousand GTMs, was flat.
Union Pacific (UNP) management commentary on their 4th quarter 2021 earnings
OMAHA, NEB., JANUARY 20, 2022
Union Pacific Corporation (NYSE: UNP) today reported 2021 fourth quarter net income of $1.7 billion, or $2.66 per diluted share. This compares to adjusted 2020 fourth quarter net income of $1.6 billion, or $2.36 per diluted share. The 2020 adjusted results exclude a $278 million pre-tax, non-cash impairment charge.
“The Union Pacific team concluded its most profitable year ever in 2021. We produced double digit fourth quarter revenue growth by leveraging our great rail franchise to generate positive business mix and core pricing gains, despite ongoing global supply chain challenges that impacted volumes,” said Lance Fritz, Union Pacific chairman, president and chief executive officer. “For the third consecutive year we improved our fuel consumption rate, taking steps to reduce our carbon footprint and meet the goals of our 2021 Climate Action Plan. While our safety and operational performance in 2021 did not meet expectations, we look to convert recent progress into sustained improvement in 2022. Although uncertainty remains around COVID variants and supply chain disruptions, we see a positive demand environment in 2022 and continued traction from business development efforts driving growth as we deliver value to all our stakeholders.”
Union Pacific Corporation (NYSE: UNP) today reported 2021 fourth quarter net income of $1.7 billion, or $2.66 per diluted share. This compares to adjusted 2020 fourth quarter net income of $1.6 billion, or $2.36 per diluted share. The 2020 adjusted results exclude a $278 million pre-tax, non-cash impairment charge.
“The Union Pacific team concluded its most profitable year ever in 2021. We produced double digit fourth quarter revenue growth by leveraging our great rail franchise to generate positive business mix and core pricing gains, despite ongoing global supply chain challenges that impacted volumes,” said Lance Fritz, Union Pacific chairman, president and chief executive officer. “For the third consecutive year we improved our fuel consumption rate, taking steps to reduce our carbon footprint and meet the goals of our 2021 Climate Action Plan. While our safety and operational performance in 2021 did not meet expectations, we look to convert recent progress into sustained improvement in 2022. Although uncertainty remains around COVID variants and supply chain disruptions, we see a positive demand environment in 2022 and continued traction from business development efforts driving growth as we deliver value to all our stakeholders.”
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Summary of Fourth Quarter Freight Revenues compared to 12 months ago
- Bulk up 12%
- Industrial down 11%
- Premium up 11%
Union Pacific (UNP) stock price chart over the last 5 years
The image below shows the stock price history of Union Pacific over the last 5 years. And its been a good time for Union Pacific stockholders with the stock increasing sharply by 125.9% over the last 5 years.
The stock of Union Pacific is trading at a lot closer to its 52 week high than it is to its 52 week low which is a clear indication that the short term sentiment and momentum of Union Pacific's stock positive at this point in time.
The stock of Union Pacific is trading at a lot closer to its 52 week high than it is to its 52 week low which is a clear indication that the short term sentiment and momentum of Union Pacific's stock positive at this point in time.
Union Pacific (UNP) stock price chart over the last 5 years
Union Pacific (UNP) vs Norfolk Southern (NSC) vs Canadian Pacific (CP) stock over the last 5 years
The image below shows the stock price performance of Union Pacific (UNP) vs Norfolk Southern (NSC) vs Canadian Pacific (CP) stock over the last 5 years. All three freight rail operators active in North America. And as the image shows the stock price performance of the three freight rail operators are very similar. The summary below shows the stock price returns provided by each stock over the last 5 years:
- Canadian Pacific (CP): 142%
- Norfolk Southern (NSC): 130.2%
- Union Pacific (UNP): 125.9%
Union Pacific (UNP) vs Norfolk Southern (NSC) vs Kansas City Southern (KSU) stock over the last 5 years
Union Pacific (UNP) latest stock valuation
Based on Union Pacific's latest earnings report and their outlook our valuation model provides a target price (full value price) at $181.70 per Union Pacific stock. We therefore believe the stock of Union Pacific is overvalued.
We usually recommend long term fundamental or value investors look to enter a stock at least 10% below our target (full value) price which in this case is $181.70. We therefore believe a good entry point into Union Pacific is at $163.50 or below. We expect the stock of Union Pacific to pull back from current levels to levels closer to our target price (full value price) in coming weeks and months. Since Union Pacific is trading at well above our suggested entry point we rate the stock as a SELL
We usually recommend long term fundamental or value investors look to enter a stock at least 10% below our target (full value) price which in this case is $181.70. We therefore believe a good entry point into Union Pacific is at $163.50 or below. We expect the stock of Union Pacific to pull back from current levels to levels closer to our target price (full value price) in coming weeks and months. Since Union Pacific is trading at well above our suggested entry point we rate the stock as a SELL
Next earnings release of Union Pacific (UNP)
It is expected that Union Pacific will release their 1st quarter 2022 earnings report at the end of April 2022