Union Pacific Corp. (NYSE:UNP)

The financial data exhibits a general upward trend in key revenue figures over the five-year period. Freight revenues increased steadily from 18,251 million US dollars in 2020 to a peak of 23,159 million in 2022, followed by a slight decline and stabilization around 22,811 million by 2024. Other revenues also showed growth until 2022, reaching 1,716 million, but then decreased gradually to 1,439 million in 2024. Consequently, operating revenues rose consistently from 19,533 million in 2020 to a high of 24,875 million in 2022, with a subsequent modest downturn and slight recovery, ending at 24,250 million in 2024.

Operating expenses experienced a noticeable increase over the analyzed period, from 11,699 million in 2020 to a peak of 15,037 million in 2023, before declining slightly to 14,537 million in 2024. Increased costs are evident across several expense categories, including compensation and benefits, which grew steadily from 3,993 million to 4,899 million, and purchased services and materials, which rose from 1,962 million to a peak of 2,616 million in 2023 before easing to 2,520 million. Fuel expenses showed significant volatility, more than doubling from 1,314 million in 2020 to 3,439 million in 2022, then decreasing to 2,474 million by 2024. Depreciation and equipment rents remained relatively stable with mild increases, while other operating expenses fluctuated but presented a moderate downward trend after peaking in 2023.

Operating income demonstrated growth from 7,834 million in 2020 to a peak of 9,917 million in 2022. This was followed by a decline to 9,082 million in 2023, then a rebound to 9,713 million in 2024. Real estate income presented variability, increasing gradually until 2023 before declining significantly in 2024 to the 2020 level of 263 million. Net periodic pension costs were generally low and fluctuated modestly without a clear trend.

Interest income remained negligible at first but showed a marked increase starting in 2021, rising to 52 million by 2023 and maintained in 2024. Non-operating property environmental remediation expenses were relatively stable with minor fluctuations between -17 million and -47 million. Interest from IRS refund claims appeared as a one-time income of 24 million in 2024, while a gain from the sale of investment was recognized only in 2021 at 36 million. Other income, net, exhibited an upward trend until 2023 but declined in 2024.

Interest expense showed a gradual rise from 1,141 million in 2020 to a peak of 1,340 million in 2023, with a slight decrease in 2024. Income before income taxes generally increased from 6,980 million in 2020 to a high of 9,072 million in 2022, followed by a decline and partial recovery, standing at 8,794 million in 2024. Income tax expense grew from 1,631 million in 2020 to 2,074 million in 2022, then decreased in 2023 before rising again in 2024.

Net income showed a consistent upward trajectory from 5,349 million in 2020 to a peak of 6,998 million in 2022, then declined in 2023 before increasing again to 6,747 million in 2024. This pattern aligns with the fluctuations observed in operating income and income before taxes.

Summary of Key Trends

The company demonstrated growth in revenue streams through 2022, followed by stabilization or mild decline. Operating expenses increased significantly, driven by higher fuel costs and personnel expenses, which compressed operating income in recent years but remained strong overall. Non-operating items and interest income showed occasional gains, enhancing net income marginally. Despite expense pressures, profitability remained robust, with net income sustaining growth until a slight dip in 2023 and partial recovery by 2024.

Insights

The upward movement in revenues through 2022 suggests strong market demand or pricing power. The surge in fuel costs notably impacted expenses, especially in 2022, indicating sensitivity to external commodity price fluctuations. The decrease in operating income in 2023, despite relatively stable revenues, reflects these cost pressures. The rebound in 2024 suggests operational adjustments or improved cost controls, but freight and other operating revenues did not return to their peak growth rates. Interest income and one-time gains contributed positively but remain minor components. Tax expenses fluctuated in line with pre-tax income changes. Overall, the performance indicates resilience amidst cost volatility, with a potential need to focus on expense management for sustained profitability.