Union Pacific Corp (UNP), a provider of rail transportation services, has announced a 16.73 percent rise in profit for the quarter ended Jun. 30, 2014, helped by growth in sales and margins.
The company earned $1,291 million or $1.43 a share in the second-quarter compared with $1,106 million or $1.18 a share a year ago. Analysts on average had predicted net income of $1.41 a share.
Revenue during the second-quarter climbed 9.96 percent to $6,015 million from $5,470 million in the last year period.
Gross margin expanded by 43 basis points over the last year period to 84.66 percent. Operating income for the quarter increased to $2,196 million compared with $1,878 million in the previous year period. That has resulted in improvement of 218 basis points in operating margins to 36.51 percent.
''Union Pacific achieved record quarterly financial results, leveraging the strengths of our diverse franchise to handle strong demand in the face of challenging operating conditions,'' said Jack Koraleski, Union Pacific chief executive officer.
Cash Flow
Union Pacific Corp has generated cash of $3,221 million from operating activities during the first half, up 0.09 percent or $3 million when compared with the last year period. The company has generated 27.64 cents of operating cash flow in every sales dollar for the first half, down from 29.91 cents in the same period last year.
The company has spent $2,178 million cash to meet investing activities during the first half, as against cash outgo of $1,739 million in the last year period. It has made net capital expenditure of $2,068 million during the first half, which was higher by 19.54 percent or $338 million, from a year ago.
The company's free cash flow accounted for 35.80 percent of operating cash flow for the first half, compared with 46.24 percent in the last year period.
The company has spent $938 million cash to meet financing activities during the first half, as against cash outgo of $697 million in the last year period. It has borrowed net of $1,255 million through debt during the first half. It has spent net of $1,450 million on repurchase of common stocks.
The company's cash dividend payment increased 20.12 percent or $130 million to $776 million.
As on Jun. 30, 2014, the company's cash balance stood at $1,537 million, down 16.69 percent or $308 million from Jun. 30, 2013.
Working Capital
Union Pacific Corp has witnessed an increase in the working capital over the last one year. The company's working capital stood at $726 million as at Jun. 30, 2014, up $8 million or 1.11 percent from $718 million on Jun. 30, 2013. It registered an increase in current ratio to 1.19 as at Jun. 30, 2014 from 1.19 on Jun. 30, 2013.
Debt Position
Union Pacific Corp has witnessed an increase in the total debt over the last one year. As on Jun. 30, 2014, total debt stood at $10,843 million, up 10.54 percent or $1,034 million, from Jun. 30, 2013.
The company's total debt was 21.03 percent of total assets as on Jun. 30, 2014, compared with 20 percent on Jun. 30, 2013. It has witnessed an increase in debt to equity ratio to 0.51 on Jun. 30, 2014 compared with 0.48 on Jun. 30, 2013.
Interest coverage ratio, which determines how easily a company can pay interest expenses on outstanding debt, has improved to 15.91 from 14.12 in the same period last year.
Shares of the company declined $0.11 or 0.11 percent to settle at $101.66 on Friday.
