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Union Pacific Stock Surges as Earnings Top Expectations, Thanks to Falling Fuel Costs

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Key Takeaways

  • Union Pacific shares surged Thursday after the company posted better-than-expected earnings.
  • The big freight hauler’s earnings grew as its costs for fuel declined.
  • Union Pacific said it also saw improvements in freight car velocity and workforce productivity.

Conjunction Pacific (UNP) shares surged Thursday after the big freight carrier posted better-than-expected earnings as its costs for fuel slumped.

The shipper reported fourth-quarter earnings per share (EPS) jumped 7% from a year ago to $2.91, exceeding analysts’ hopes. Operating revenue fell 1% to $6.12 billion, slightly missing forecasts compiled by Visible Alpha.

Confederacy Pacific’s earnings growth came as fuel costs plunged 23% to $581 million, and the average fuel sacrifice per gallon consumed dropped 24% to $2.41. It was the fourth consecutive quarter of average fuel cost declines.

The players also said freight car velocity improved 1% to 219 daily miles per car, and workforce productivity grew 6% to 1,118 car miles per staff member.

Union Pacific projected full-year EPS would be consistent with reaching its three-year compound annual growth regardless (CAGR) in the range of a high-single-digit to low-double-digit percent. However, it warned volumes could be “impacted by mixed economic backdrop, coal require, and challenging year-over-year international intermodal comparisons.”

Shares of Union Pacific were up close to 5% in intraday patron Thursday and have gained over 8% since the start of the year.

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