Shares of Union Pacific (NYSE:UNP) jumped 3.2% in pre-market trading on Thursday, April 27, 2017 after the company reported better-than-expected results. The company reported a 6.3% year-over-year increase in quarterly revenues. It beat the Zacks Consensus Estimate on both earnings and revenues in the first quarter of 2017.
Q1 Performance
Union Pacific reported non-GAAP earnings per share of $1.32, which beat the Zacks Consensus Estimate of $1.23 and increased from $1.16 in the year-ago period. Moreover, revenues of $5.132 billion came ahead of the consensus mark of $4.998 billion. Operating income rose to $1.79 billion from $1.68 billion a year earlier (read: Union Pacific Beats on Q1 Earnings).
Revenue Performance
Freight revenues were up to $4.794 billion from $4.502 billion a year earlier.
Other revenues rose to $338 million from $327 million a year earlier.
Revenue carloads rose to 2.088 million from 2.044 million a year earlier.
Average revenue per car increased to $2,297 from $2,202 a year earlier.
In the current scenario, we believe it is prudent to discuss the following ETFs that have a relatively high exposure to Union Pacific:
Industrial Select Sector SPDR Fund XLI
This fund focuses on providing exposure to the U.S. industrial sector. It has AUM of $11.20 billion and charges a fee of 14 basis points a year. It has a 4.57% allocation to Union Pacific (as of April 28, 2017). The fund returned 17.52% in the past one year and 6.62% in the year-to-date time frame (as of April 28, 2017). XLI currently has a Zacks ETF Rank of #2 (Buy) with a Medium risk outlook (read: 4 Top Sector ETFs & Stocks to Outperform in Q1 Earnings).
iShares Transportation Average ETF IYT
This fund provides exposure to the U.S. transportation sector. It has AUM of $966.62 million and charges a fee of 44 basis points a year. It has a 7.43% allocation to Union Pacific (as of April 27, 2017). The fund returned 15.30% in the past one year and 0.63% in the year-to-date time frame (as of April 28, 2017). IYT currently has a Zacks ETF Rank of #1 (Strong Buy) with a High risk outlook.
Vanguard Industrials ETF (MC:VIS)
This ETF is a relatively cheaper bet on the U.S. industrials sector. It has AUM of $3 billion and charges a fee of 10 basis points a year. It has 3.3% allocation to Union Pacific (as of March 31, 2017). The fund returned 18.05% in the past one year and 5.68% in the year-to-date time frame (as of April 28, 2017). VIS currently has a Zacks ETF Rank of #2 with a Medium risk outlook.
Source: Yahoo (NASDAQ:YHOO) Finance
To Conclude
Union Pacific reported better-than-expected results. Its share performance has been impressive in the past year (up 27.05%) and year-to-date time frame (up 7.99%). Therefore, we believe the current scenario presents a strong case for investing in these ETFs with high exposure to Union Pacific.
Want key ETF info delivered straight to your inbox?
Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week. Get it free >>
Union Pacific Corporation (UNP): Free Stock Analysis Report
VIPERS-INDUS (VIS): ETF Research Reports
ISHARS-TRAN AVG (IYT): ETF Research Reports
SPDR-INDU SELS (XLI): ETF Research Reports
Original post
Zacks Investment Research