First look: Union Pacific earnings

Intermodal leads volume growth

A Union Pacific locomotive leads Norfolk Southern units in this undated photo. (Photo: Union Pacific)

Union Pacific reported a 16% increase in third-quarter profit Thursday as higher freight volumes, pricing gains and fuel surcharges lifted revenue, with intermodal traffic leading the railroad’s growth.

The Omaha-based railroad (NYSE: UNP) earned $2.08 billion, or $3.49 per diluted share, compared with $1.79 billion, or $3.01 per share, a year earlier. Adjusted earnings of $3.53 per share exceeded the $3.47 consensus estimate compiled by Zacks Investment Research.

Operating revenue increased 15% to $7.2 billion, while freight revenue excluding fuel surcharges rose 6%. Total revenue carloads grew 6% to 2.29 million. Intermodal volume increased 11% to 956,000 containers and trailers, and intermodal revenue climbed 27% to $1.52 billion. Industrial volumes rose 6%, while bulk traffic was essentially flat.

“Union Pacific’s third quarter results demonstrate our ability to safely deliver the service we sold to our customers while efficiently handling 6% volume growth,” Chief Executive Jim Vena said in the earnings release.

Operating income increased 15% to $2.94 billion. The reported operating ratio improved slightly to 59.1% from 59.2%, although the adjusted ratio deteriorated 30 basis points to 58.8%. Higher fuel prices added 140 basis points to the ratio, the company said. Workforce productivity improved 5%, while average terminal dwell declined 2% to 19.9 hours.

Union Pacific reaffirmed its forecast for high-single-digit growth in reported earnings per share for 2026 and updated its capital spending plan to $3.5 billion. Vena also pointed to upcoming steps in the Surface Transportation Board’s review of the railroad’s proposed merger with Norfolk Southern (NYSE: NSC).

Why it matters: Union Pacific’s earnings show how intermodal growth and pricing gains are supporting profits even as higher fuel costs pressure operating efficiency.

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Read more articles by Stuart Chirls here.

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Stuart Chirls

Stuart Chirls is a journalist who has covered the full breadth of railroads, intermodal, container shipping, ports, supply chain and logistics for Railway Age, the Journal of Commerce and IANA. He has also staffed at S&P, McGraw-Hill, United Business Media, Advance Media, Tribune Co., The New York Times Co., and worked in supply chain with BASF, the world's largest chemical producer. Reach him at stuartchirls@firecrown.com.