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Union Pacific (NYSE:UNP) notched an earnings beat for the third quarter, but forecast continued efficiency issues into year-end on Thursday.

finviz dynamic chart for UNP

The railroad operator reported $3.19 in adjusted earnings per share alongside $6.6B in operating revenue, up 18% from the prior year. Analysts had anticipated $3.06 and $6.41B, respectively. The Nebraska-based company’s operating ratio deteriorated to 59.9% from 56.3% in 2021. Wall Street had forecast a report of 57.1% in the third quarter.

“Inflationary pressures and operational inefficiencies continued to challenge us,” CEO Lance Fritz said. “We reported strong revenue and operating income growth in the quarter through increased fuel surcharge revenue, volume gains, and solid core pricing. As we close out 2022, we will maintain strong price discipline while improving efficiency and service to capitalize on the available demand.”

Fritz updated the company’s full-year guidance to reflect full year carload growth of about 3% and an operating ratio around 60%, up from a prior 58% forecast. Analyst consensus for the full year operating ratio stood at 58.5% prior to the report.

Shares of Union Pacific Corporation (UNP) slid 3.03% in premarket trading on Thursday.

Management also updated its full year buyback plan to $6.5B. The company said 9.5M shares were repurchased at an aggregate cost of $2.1B during the third quarter.

Photo by Eddie Bugajewski on Unsplash

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