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.