(Reuters) – U.S. railroad Union Pacific said on Thursday it expects its revenue to grow faster than volumes over the next three years, outpacing the market.
In the filing released ahead of the company’s investor day event, Union Pacific forecast an earnings per share compound annual growth rate (EPS CAGR) in the high single to low double digit range.
The company said it will maintain an industry leading operating ratio over the next three years.
Better train speeds and shorter dwell time boosted the company’s operating ratio in the second quarter from a year ago, helping it beat its quarterly profit estimates at a time when volume headwinds persisted, especially in coal.
Stephens analyst Daniel Imbro pointed that the company’s EPS CAGR “could disappoint as the Street is currently assuming adj. EPS growth of 12% in 2025 and 10% in 2026.”
Shares of the company were down more than 1.5% in morning trading.
Union Pacific said it will complete annual share repurchases of $4 billion to $5 billion starting 2025, adding that it looks to maintain a strong, investment grade credit rating.
It expects annual capital investments of roughly $3.5 billion to $3.7 billion over the next three years.
(Reporting by Abhinav Parmar in Bengaluru; Editing by Shreya Biswas)