Union Pacific Q4 EPS Falls to $2.86 as 1% Revenue Drop, 4% Carload Decline
Union Pacific’s Q4 adjusted EPS fell 3.4% to $2.86 on a 1% revenue drop to $6.1 billion and a 4% decline in carloads, while net income reached $1.8 billion. For 2025, net income rose 6% to $7.1 billion and diluted EPS climbed 8% to $11.98, boosting the operating ratio 60 bp to 59.3%.
1. Record Full-Year 2025 Results
Union Pacific reported full-year net income of $7.1 billion, a 6 % increase versus 2024, and diluted EPS of $11.98, up 8 %. Operating revenue rose 1 % to $24.5 billion, driven by core pricing gains and higher volume, while freight revenue excluding fuel surcharge grew 3 %. Revenue carloads increased 1 %, and the company improved its reported operating ratio by 10 basis points to 59.8 %, with an adjusted operating ratio of 59.3 %, a 60-basis-point improvement. These metrics marked best-ever annual records for freight revenue excluding fuel surcharge, net income and multiple operational efficiency measures.
2. Q4 2025 Earnings and Revenue Trends
In the fourth quarter, Union Pacific reported net income of $1.8 billion and diluted EPS of $3.11, which included $234 million of industrial park land sales (adding $0.30 per share) and $30 million of merger-related costs (subtracting $0.05 per share). On an adjusted basis, EPS was $2.86, down from $2.96 a year earlier. Operating revenue fell 1 % to $6.08 billion as revenue carloads declined 4 % year-over-year. Core pricing gains and fuel surcharge revenue partially offset volume pressures, but freight revenue in the Premium segment weakened while Bulk and Industrial segments showed growth.
3. Efficiency and Productivity Improvements
Union Pacific achieved best-ever quarterly records for freight car velocity (239 daily miles per car, +9 %), average terminal dwell (19.8 hours, –9 %), train length (9,729 feet, +3 %) and workforce productivity (1,151 car miles per employee, +3 %). Full-year measures also improved, with locomotive productivity up 3 % and fuel consumption rates declining. These advances contributed to a lower adjusted operating ratio in Q4 of 60.0 % and full-year of 59.3 %, reinforcing the company’s ability to manage costs and drive service performance.
4. 2026 Outlook and Capital Allocation
Management guides for mid-single-digit EPS growth in 2026, consistent with its three-year CAGR target of high-single to low-double digits through 2027. The capital plan calls for approximately $3.3 billion in expenditures next year, focused on network enhancements and equipment renewal. Union Pacific also plans to sustain annual dividend increases and maintain its industry-leading return on invested capital, underpinned by continued strong cash generation and disciplined pricing in excess of inflation.