Union Pacific (NYSE:UNP)
Historical Stock Chart
6 Months : From May 2018 to Nov 2018
By Colin Kellaher
Union Pacific Corp. (UNP) plans to buy back about $20 billion worth of stock between 2018 and 2020 and expects to achieve a 60% operating ratio on a full-year basis by 2020.
In a presentation to investors Thursday, the Omaha, Neb., railroad operator said it also expects positive annual volume growth over the next three years. Union Pacific posted an 11% decline in volume between 2015 and 2017.
Union Pacific's operating ratio, or operating expenses as a percentage of revenue, was 62.8% in 2017. The railroad's ultimate goal is a ratio of 55%.
The company said capital expenditures will remain at or below 15% of revenue for the foreseeable future, including an estimated $3.3 billion in 2018. The railroad is targeting a dividend payout ratio of 40%-45%.
Union Pacific said it expects to reach its targeted adjusted debt-to-Ebitda ratio of up to 2.7 over the next two to three years; and that it aims to maintain investment-grade credit ratings of at least "Baa1" by Moody's and "BBB+" by Standard & Poors.
S&P late Thursday lowered its corporate credit rating on Union Pacific to 'A-' from 'A,' citing the planned $20 billion share repurchase, which S&P said will be partially funded through incremental debt, resulting in weaker credit metrics.
Write to Colin Kellaher at firstname.lastname@example.org
(END) Dow Jones Newswires
June 01, 2018 07:14 ET (11:14 GMT)
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