Executive Summary
Union Pacific delivered a solid Q3 2024 performance with revenue of $6.091 billion, marking a 2.5% year-over-year increase and 1.4% quarter-over-quarter growth. The company posted robust gross margin of approximately 45.5% and operating margin near 39.6%, driven by favorable pricing dynamics and disciplined cost management. Net income reached $1.671 billion, delivering a net margin of roughly 27.4% and an EPS of $2.75. EBITDA stood at $3.112 billion (EBITDA margin ~51.1%), underscoring the resilience of UP’s asset-light-to-asset-heavy model and its capacity to convert volume and pricing into substantial cash flow.
Cash generation remained a standout feature: operating cash flow was $2.651 billion, with capital expenditures of $0.831 billion and free cash flow of $1.82 billion. Free cash flow per share was about $3.00, and operating cash flow per share was $4.36, highlighting the ability to fund dividends and buybacks while sustaining network investments. Free cash flow supported a meaningful level of capital returns (dividends of $0.815 billion and share repurchases of $0.731 billion), though financing activity weighed on overall cash position due to net debt management and debt service.
On the balance sheet, UP remains heavily leveraged, with total debt of $32.696 billion and net debt of $31.749 billion against total assets of $67.6 billion and stockholders’ equity of $16.584 billion. Liquidity metrics show near-term liquidity headwinds: current ratio 0.773 and quick ratio 0.629, with cash on hand of $0.947 billion. Nonetheless, the company generated stable cash flow and continues to invest in capacity and reliability, which should support earnings durability in a steady-to-modest growth freight environment. Investors should watch capacity investments, labor dynamics, and macro demand signals as key determinants of continued margin resilience and cash flow sustainability.
Key Performance Indicators
Key Insights
Revenue: $6.091B (YoY +2.52%, QoQ +1.40%)
Gross Profit: $2.77B, Gross Margin 45.48% (YoY +8.41%, QoQ +1.54%)
Operating Income: $2.409B, Operating Margin 39.55% (YoY +10.66%, QoQ +0.71%)
Net Income: $1.671B, Net Margin 27.43% (YoY +9.36%, QoQ -0.12%)
EPS: $2.75 (YoY +9.56%, QoQ 0.00%)
Cash Flow and Capital Allocation:
Operating Cash Flow: $2.651B
Capex: $0.831B
Free Cash Flow: $1.82B
Dividends Paid: $0.815B
Share Buybacks: $0.731B
Net Change in Cash: -$0.19B
Cash at End of Period: $0.957B
Free C...
Financial Highlights
Revenue: $6.091B (YoY +2.52%, QoQ +1.40%)
Gross Profit: $2.77B, Gross Margin 45.48% (YoY +8.41%, QoQ +1.54%)
Operating Income: $2.409B, Operating Margin 39.55% (YoY +10.66%, QoQ +0.71%)
Net Income: $1.671B, Net Margin 27.43% (YoY +9.36%, QoQ -0.12%)
EPS: $2.75 (YoY +9.56%, QoQ 0.00%)
Cash Flow and Capital Allocation:
Operating Cash Flow: $2.651B
Capex: $0.831B
Free Cash Flow: $1.82B
Dividends Paid: $0.815B
Share Buybacks: $0.731B
Net Change in Cash: -$0.19B
Cash at End of Period: $0.957B
Free Cash Flow per Share: $3.00
Operating Cash Flow per Share: $4.36
Balance Sheet and Liquidity:
Total Assets: $67.57B; Total Liabilities: $50.99B; Stockholders’ Equity: $16.58B
Long-Term Debt: $30.70B; Short-Term Debt: $2.00B
Cash and Cash Equivalents: $0.947B; Net Debt: $31.75B
Current Ratio: 0.773; Quick Ratio: 0.629; Cash Ratio: 0.176
EBITDA: $3.112B; EBITDARatio: 0.511; Net Debt to EBITDA ~10x
Valuation Metrics (as of QQ3 2024): P/E 22.3; P/B 8.98; P/S 24.46; EV/EBITDA 48.09; Dividend Yield ~0.55%; FCF per share $3.00; Price to FCF 81.85; Dividend payout ratio 48.8%.
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
6.09B |
2.52% |
1.40% |
| Gross Profit |
2.77B |
8.41% |
1.54% |
| Operating Income |
2.41B |
10.66% |
0.71% |
| Net Income |
1.67B |
9.36% |
-0.12% |
| EPS |
2.75 |
9.56% |
0.00% |
Key Financial Ratios
operatingProfitMargin
39.7%
operatingCashFlowPerShare
$4.36
dividendPayoutRatio
48.8%
Management Commentary
Transcript data for QQ3 2024 earnings call was not provided in the supplied materials. Consequently, a dedicated transcript highlights section cannot be populated with verbatim management quotes or theme-based summaries. The analysis below incorporates only the quantitative results from the 10-Q and publicly available quarterly data. Where management commentary would normally be cited, insights are drawn from the reported metrics and typical industry context rather than direct quotes.
Transcript not provided in the supplied data.
— N/A
Transcript not provided in the supplied data.
— N/A
Forward Guidance
No explicit forward-looking guidance was included in the QQ3 2024 10-Q filing. Based on the quarterly trajectory and industry dynamics, we expect continued moderate revenue growth driven by pricing discipline and volume resilience, supported by ongoing network investments to improve throughput and reliability. Key factors to monitor include: (1) freight volume trends across consumer and industrial segments, (2) sustained pricing power and service differentiation, (3) capital expenditure levels required to maintain and expand capacity, (4) labor relations and productivity, and (5) macroeconomic conditions influencing freight demand and commodity mix. If volumes hold steady and pricing remains favorable, UP’s cash flow generation should remain robust, enabling ongoing dividends and share buybacks. Risks to this outlook include a slower-than-expected macro recovery, sustained volume softness in key coal/intermodal segments, higher fuel costs or regulatory costs, and potential capital discipline shifts by management under varying liquidity conditions.