Western Railroad Discussion > UP Stock takes a dive today down

The stock is down $4.85 at this time on lower than expected earnings.

also much lower earnings from coal.  I think they said coal revenue was down 19%, year over year.

Less coal hauled, and less revenue on each load isn't a good situation

UP may have restructured coal rates (ie. lower rates in return for increased asset utilization).  The revenue decline doesn't match the increased coal tonnage UP is moving out of the PRB since last May.  I suspect the results for the next quarter will show improvement.  UP has put quite a few stored coal hoppers back in service over the last 6 weeks, most going to the PRB.  And rumors are flying there might be a significant increase in the number of coal trains loading in western Colorado and in Utah soon.  Some of that will depend on the spot market, something that can't be predicted in advance.


Allen



Edited 1 time(s). Last edit at 10/20/16 07:56 by bradleymckay.

Spotted a loaded coal train going eastbound through Cheyenne last week. This seems to fit with the rumor.
Also some interesting posts last week or so showing action on the Craig Branch (or whatever it's called these days).

bradleymckay Wrote:
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...  And rumors are flying there might be a
> significant increase in the number of coal trains
> loading in western Colorado and in Utah soon. 
...

Last July I bumped into a friend of mine who works at the UP and he said then that there was a sudden rise in coal loadings at that time.

Bob Krieger
Cheyenne, WY

Could be that coal power plants are loading up for expected cold winter.

That'd be fairly true, even our small plant in Fremont NE has a pretty decent coal pile.

Out

czuleget Wrote:
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> The stock is down $4.85 at this time on lower than
> expected earnings.

Down $6.48 for the day.

There's plenty to mock Wall St. behavior using the Associated Press (AP) story:

Its revenue declined 7 percent to $5.17 billion in the quarter from $5.56 billion. The six analysts surveyed by Zacks expected $5.14 billion.

Why the panic? Union Pacific beat expectations! 

Its stock fell more than 6 percent on Thursday after the railroad reported earning $1.13 billion, or $1.36 per share, in the quarter. That's down from $1.3 billion, or $1.50 per share.

The 13 analysts surveyed by Zacks Investment Research expected earnings of $1.39 per share, on average.

Ah, I see, on per share basis, earnings were below expectations! I call that $2 billion Buyback Fail. Or were officers too busy dumping their shares and diluted it more than expected? :-)

The railroad has about 2,700 employees on furlough and 1,500 locomotives in storage. But Edward Jones analyst Logan Purk said it's disappointing that Union Pacific didn't do more to cut costs given the declining demand.

I don't think any UP craft employees are getting paid to do nothing... or maybe staffing is so barebones that it's causing crew shortages or other problems that actually delay the trains (and hurt revenue per cost)? Hurry up and wait! Maybe the analyst should be more explicit about where the cuts should me made (Omaha?)

Little off topic, but I've heard some interesting PTC problems on ZLCBRB's at West Colton causing delays, and on more than one occasion during my visits to SoCal the past several months.

Not that it is connected to UP in anyway but a CSX President sold $500,000 worth of CSX stock earlier this month.

http://www.thecerbatgem.com/2016/10/12/clarence-w-gooden-sells-16129-shares-of-csx-corp-csx-stock.html

Posted from iPhone

howeld Wrote:
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> Not that it is connected to UP in anyway but a CSX
> President sold $500,000 worth of CSX stock earlier
> this month.
>
> http://www.thecerbatgem.com/2016/10/12/clarence-w-
> gooden-sells-16129-shares-of-csx-corp-csx-stock.ht
> ml
>
> Posted from iPhone

Many execs get so many stock options (rights to buy stock in the future at a specified price) that they set up brokerage plans to sell it automatically. Often a week or so after earnings are released.

The benefit to this is a general umbrella against charges they "knew something" and sold in advance of news.

(It's also a reminder that receiving some compensation in stock or options is a wonderful way for the guys who gave back work rules, benefits, etc to get a piece of the future gains.)

Lackawanna484 Wrote:
-------------------------------------------------------
> Many execs get so many stock options (rights to
> buy stock in the future at a specified price) that
> they set up brokerage plans to sell it
> automatically. Often a week or so after earnings
> are released.
>
> The benefit to this is a general umbrella against
> charges they "knew something" and sold in advance
> of news.

Those who have been looking at various charts for the UP can determine (with conviction) that those "automatic sales" had a price range, so while they don't participate in day-to-day manipulation of stock prices (pretty obvious most of them don't), they have a good idea when their own company is over-valued.

That's why insider transaction information is publicly available as an additional tool, so traders can act based on that information. So  really, there's no need to "defend" what they do and insinuate that the officers buy/sell the shares of their own company "automatically" like some random act.

cchan006 Wrote:
-------------------------------------------------------
> Lackawanna484 Wrote:
> --------------------------------------------------
> -----
> > Many execs get so many stock options (rights to
> > buy stock in the future at a specified price)
> that
> > they set up brokerage plans to sell it
> > automatically. Often a week or so after
> earnings
> > are released.
> >
> > The benefit to this is a general umbrella
> against
> > charges they "knew something" and sold in
> advance
> > of news.
>
> Those who have been looking at various charts for
> the UP can determine (with conviction) that those
> "automatic sales" had a price range, so while they
> don't participate in day-to-day manipulation of
> stock prices (pretty obvious most of them don't),
> they have a good idea when their own company is
> over-valued.
>
> That's why insider transaction information is
> publicly available as an additional tool, so
> traders can act based on that information. So
>  really, there's no need to "defend" what they do
> and insinuate that the officers buy/sell the
> shares of their own company "automatically" like
> some random act.

The "automatic" nature of the planned schedule is what makes it neutral. My former company required any tier 4 or higher officer to sell shares or exercise options only in the ten days after earnings.

There wasn't any insinuation of anything, as far as I can tell..