One Reason Union Pacific (UNP) Stock Is Going Down

NEW YORK (TheStreet) -- Shares of Union Pacific (UNP) are lowering 0.5% to $100.85 after the company furloughed about 900 railroad workers yesterday due to weaker than expected shipping demand, AP reports. 

The recent furloughs are also part of the railroad company's efforts to align its workforce with the current market, Union Pacific's spokesman Aaron Hunt said, according to AP

The number of shipments the Nebraska-based company has been delivering so far is down about 3%, and this includes a 30% decrease in coal carloads, AP added. As a result, the company said last month that it had begun reducing rail crews and storing some locomotives, the publication noted.

Union Pacific, through its subsidiary Union Pacific Railroad Company, operates railroads in the U.S. 

Separately, TheStreet Ratings team rates UNION PACIFIC CORP as a Buy with a ratings score of A. TheStreet Ratings Team has this to say about their recommendation:

"We rate UNION PACIFIC CORP (UNP) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its growth in earnings per share, increase in net income, notable return on equity, expanding profit margins and good cash flow from operations. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • UNION PACIFIC CORP has improved earnings per share by 9.2% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, UNION PACIFIC CORP increased its bottom line by earning $5.76 versus $4.72 in the prior year. This year, the market expects an improvement in earnings ($6.19 versus $5.76).
  • The net income growth from the same quarter one year ago has greatly exceeded that of the S&P 500, but is less than that of the Road & Rail industry average. The net income increased by 5.8% when compared to the same quarter one year prior, going from $1,088.00 million to $1,151.00 million.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. When compared to other companies in the Road & Rail industry and the overall market, UNION PACIFIC CORP's return on equity exceeds that of the industry average and significantly exceeds that of the S&P 500.
  • 43.96% is the gross profit margin for UNION PACIFIC CORP which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 20.50% is above that of the industry average.
  • Net operating cash flow has increased to $2,064.00 million or 16.80% when compared to the same quarter last year. Despite an increase in cash flow, UNION PACIFIC CORP's average is still marginally south of the industry average growth rate of 23.43%.
  • You can view the full analysis from the report here: UNP Ratings Report

More from Markets

Trump Takes Aim at Auto Imports; Markets End Mixed -- ICYMI

Trump Takes Aim at Auto Imports; Markets End Mixed -- ICYMI

Video: What Oprah's Content Partnership With Apple Means for the Rest of Tech

Video: What Oprah's Content Partnership With Apple Means for the Rest of Tech

REPLAY: Jim Cramer on the Markets, Oil, Starbucks, Tesla, Okta and Red Hat

REPLAY: Jim Cramer on the Markets, Oil, Starbucks, Tesla, Okta and Red Hat

Flashback Friday: The Market Movers

Flashback Friday: The Market Movers

OPEC Deal Doesn't Boost Production Enough to Drive Down Crude, Gasoline Prices

OPEC Deal Doesn't Boost Production Enough to Drive Down Crude, Gasoline Prices