What's Going On With Union Pacific Shares Today

Union Pacific Corp UNP reported a second-quarter FY23 operating revenue decline of 5% year-over-year to $5.96 billion, missing the consensus of $6.12 billion.

The company mentioned that softening consumer markets, inflation, one-time labor expense, and increased workforce levels impacted the quarter.

Freight revenues decrease 5% Y/Y to $5.57 billion, with Bulk -3%, Industrial flat Y/Y and Premium -11%.

EPS was $2.57 (-12% Y/Y), missing the consensus of $2.75.

The operating ratio was 63%%, which expanded by 280 bps compared to 2Q22. Operating income declined 12% Y/Y to $2.2 billion.

The company reported Q2 freight car velocity of 202 daily miles per car, an improvement of 8%, and locomotive productivity of 126 gross ton-miles (GTMs) per horsepower day, a 2% improvement.

UNP's first-half reportable derailment rate improved by 9% to 2.45 per million train miles compared to 2.68 for 2022.

Union Pacific generated operating cash flow year-to-date of $3.86 billion versus $4.17 billion a year ago. Free cash flow was $596 million.

UNP repurchased 600,000 shares in the quarter at an aggregate cost of $120 million.

Additionally, the company announced the appointment of Jim Vena as chief executive officer; Beth Whited as president, and elected Mike McCarthy as chairman, effective August 14, 2023.

Dividend: Union Pacific declared a quarterly dividend of $1.30 per share, payable September 29, 2023, to shareholders of record August 31, 2023.

FY23 Guidance: UNP expects consumer-related volumes likely drive full-year volume expectations below Industrial Production (current forecast: +0.1%).

The company sees $50 million -$70 million in labor expenses from new agreements in the second half of 2023.

Price Action: UNP shares are trading higher by 11.3% at $240.01 on the last check Wednesday.