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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