Union Pacific reported fourth-quarter net income of $1.8 billion, up from $1.7 billion a year ago, driven in part by a $234 million gain from industrial park land sales. Diluted EPS came in at $3.11, with adjusted EPS of $2.86, missing consensus forecasts by $0.04. Merger-related costs of $30 million reduced EPS by $0.05. Investors will note that adjusted net income of $1.7 billion was down slightly versus the prior year’s adjusted $1.8 billion.

Operating revenue declined 1% year-over-year to $6.1 billion as a 4% drop in revenue carloads offset core pricing gains and higher fuel surcharge revenue. Core freight revenue (excluding fuel surcharge) held relatively steady, but volume headwinds in coal, agricultural products and automotive shipments weighed on top-line performance. Average pricing increases remained in the mid-single-digit range, consistent with management’s target of pricing gains exceeding inflationary pressures.

Union Pacific delivered best-ever quarterly records for freight car velocity (239 daily miles per car, +9%), terminal dwell (19.8 hours, −9%) and workforce productivity (1,151 car miles per employee, +3%). Reportable personal injury and derailment rates both improved versus the prior year, underscoring continued progress on the company’s safety initiatives. Adjusted operating ratio deteriorated 190 basis points to 60.0%, reflecting the volume decline and higher fuel costs, but remains among the industry’s strongest.

Full-year 2025 net income rose 6% to $7.1 billion, with diluted EPS of $11.98, and adjusted EPS of $11.66 (+5%). Operating revenue grew 1% to $24.5 billion, driven by pricing gains and a modest volume increase. Reported operating ratio improved 10 basis points to 59.8%. For 2026, management forecasts mid-single-digit EPS growth, continued operating ratio improvements and capital expenditures of $3.3 billion, while targeting high-single-digit to low-double-digit EPS CAGR through 2027.