Union Pacific Corporation (NYSE:UNP) has failed to meet the expectations for its 1Q2015. The company made $5.6 billion in revenue, compared to the expected $5.7 billion. Consequently, the EPS missed by $0.07, to report $1.30. Additionally, the company’s railroad wing was able to grab the Logistics Excellent Award from Toyota and the company can expect to attract more business through it. The award was given to Union Pacific Railroad in the customer service and service performance category. This is the company’s sixth and fourth consecutive victory, respectively.
Union Pacific has, however, clarified that the loss was mainly due to the reduction in oil prices and a fall in business volume. The two factors have caused revenues to fall by 1%, compared to the same period last year. The company has been able to decrease its operation costs by 4% from $3.6 billion. Additionally, diluted EPS has also registered an increase from $1.19. The net income has also registered an increase of 7% to $1.9 billion, compared to last year.
It has been pointed out that Union Pacific has been facing strong competition in its agriculture related business, from Burlington Northern SantaFe Corp. Had the increased competition not emerged, UNP would have definitely reported a much better quarter and even beat estimates. With the current situation, a total of 24 analysts rate the stock as a buy, while 7 rate it as hold.
The recently achieved award from Toyota, might just give the company an edge of winning back lost business. The award is known to look at several factors including: communication, equipment, performance and ease of doing business, amongst others. The VP and GM at UNP-Automotive, Linda Brandl, stated that the award reflects on our dedication towards customer satisfaction. She also stated that the award is an honor and would motivate the company to provide more innovative solutions.
Union Pacific Corporation (NYSE:UNP) closed at $108.12 after losing 2.36% on April 23. The company trades 881.28 million shares in the market, with a 52-week range of $93.36-$124.52.