Sept 19 (Askume) – U.S. railroad Union Pacific Co (UNP.N) said on Thursday it expects revenue to grow faster than sales over the next three years, outpacing market growth.
In a filing released ahead of the company’s investor day event, Union Pacific estimated that its earnings per share compound annual growth rate (EPS CAGR) would be in the high single-digit to low double-digit range.
The company said it will maintain an industry-leading operating ratio over the next three years.
Higher rail speeds and shorter dwell times boosted the company’s operating ratio in the second quarter compared with the same period last year , helping it beat quarterly profit guidance at a time when sales constraints persist, especially in coal.
Stephens analyst Daniel Imbro said the company’s EPS compound annual growth rate “may disappoint, as the market is currently assuming average EPS growth of 12% in 2025 and 10% in 2026.”
The company’s shares fell more than 1.5% in early trade.
Union Pacific said it would repurchase $4 billion to $5 billion of shares annually through 2025, adding that it intends to maintain a strong investment-grade credit rating.
Capital investment is expected to be approximately US$3.5 billion to US$3.7 billion per year over the next three years.
