Union Pacific Earnings Preview

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Union Pacific (NYS: UNP) beat estimates by $0.01 last quarter and investors are hoping it can beat them again. The company will unveil its latest earnings on Thursday, Oct. 20. Union Pacific links 23 states in the western two-thirds of the United States through its operating company, Union Pacific Railroad Company.

What analysts say:

  • Buy, sell, or hold?: Analysts strongly back Union Pacific, with 20 of 24 rating it a buy and the remainder rating it a hold. Analysts like Union Pacific better than competitor Canadian National Railway overall. Analysts still rate the stock a moderate buy, but they are a bit more wary about it compared to three months ago.
  • Revenue forecasts: On average, analysts predict $5.01 billion in revenue this quarter. That would represent a rise of 13.6% from the year-ago quarter.
  • Wall Street earnings expectations: The average analyst estimate is earnings of $1.81 per share. Estimates range from $1.73 to $1.91.

What our community says:
CAPS All-Stars are solidly behind the stock with 98% assigning it an "outperform" rating. The community at large concurs with the All-Stars with 96.6% awarding it a rating of "outperform." Fools are bullish on Union Pacific and haven't been shy with their opinions lately, logging 367 posts in the past 30 days. Union Pacific has a bullish CAPS rating of five out of five stars that is about on par with the Fool community assessment.

Management:
Union Pacific's profit has risen year over year by an average of 31.3% over the past five quarters. The company's gross margin shrank by 2.5 percentage points in the last quarter. Revenue rose 16.2% while cost of sales rose 25% to $1.7 billion from a year earlier.

Now let's look at how efficient management is at running the business. Traditionally, margins represent the efficiency with which companies capture portions of sales dollars. The following table shows gross, operating, and net margins over the past four quarters.

Quarter

Q2

Q1

Q4

Q3

Gross Margin

64.9%

64.3%

79.9%

65.0%

Operating Margin

28.7%

25.3%

29.8%

31.8%

Net Margin

16.2%

14.2%

17.6%

17.6%

One final thing: If you want to keep tabs on Union Pacific movements -- and for more analysis on the company -- make sure you add it to your Watchlist.

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At the time this article was published

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