Union Pacific rides improved volume trend to earnings beat

Union Pacific Corporation (UNP) traded higher in premarket action on Thursday after the rail giant delivered improved results with its second quarter earnings report.

Operating revenue rose 12% year over year to $6.9B, driven by higher fuel surcharges, volume growth, core pricing gains, and greater other revenue, partially offset by business mix. Freight revenue increased 12% during the quarter, and freight revenue excluding fuel surcharge grew 4%.

On an adjusted basis, Union Pacific's (UNP) operating ratio improved by 110 basis points to 59.2%, net income increased 12% to $2.0B, and adjusted diluted EPS was 13% higher at $3.41 to top the consensus estimate of $3.23.

"Strong execution and volume growth enabled another successful quarter and record financial results," noted Union Pacific (UNP) CEO Jim Vena. "Looking ahead, we are prepared to meet increasing customer demand with best-in-class safety, service, and operational excellence. Additionally, we are ready to move forward in the regulatory process and deliver the benefits of America's first transcontinental railroad, offering greater competition, better service, and a stronger supply chain," he added.

Shares of Union Pacific (UNP) were 1.5% higher at $296.67 in the premarket session. The 52-week high for the rail stock is $303.15.