Union Pacific reported fourth quarter net income of $1.8 billion, including $234 million from industrial park land sales, translating to diluted EPS of $3.11. Excluding one-time items, adjusted net income was $1.7 billion, or $2.86 per share, down from $2.96 in the year-ago quarter and below consensus estimates. Operating revenue declined 1% year-over-year to $6.1 billion, driven by a 4% drop in carload volumes that was only partially offset by core pricing gains and fuel surcharge revenue. The reported operating ratio widened by 180 basis points to 60.5%, while the adjusted ratio deteriorated by 190 basis points to 60.0%.

Despite lower volumes, Union Pacific set new quarterly records in several operating metrics. Freight car velocity improved 9% to 239 daily miles per car, and average terminal dwell decreased 9% to 19.8 hours. Average train length increased 3% to 9,729 feet, and workforce productivity rose 3% to 1,151 car miles per employee. Safety performance also strengthened, with both reportable personal injury and derailment rates improving compared to the prior year.

For the full year, operating revenue reached $24.5 billion, up 1% on core pricing gains and higher volume, partially offset by reduced fuel surcharges and mixed business lines. Freight revenue excluding fuel surcharge grew 3%, and revenue carloads increased 1%. Reported net income rose 6% to $7.1 billion, or $11.98 per share, while adjusted net income grew 3% to $6.9 billion, or $11.66 per share. The full-year operating ratio improved 10 basis points to 59.8%, with the adjusted ratio improving 60 basis points to 59.3%. 2025 also produced best-ever annual records for safety, freight car velocity (225 miles per car, +8%), locomotive productivity (+3%), terminal dwell (20.9 hours, –8%), train length and workforce productivity (+7%).

Management forecasts mid-single digit earnings per share growth for 2026, consistent with its three-year CAGR target of high-single to low-double digits through 2027. The company plans $3.3 billion in capital expenditures, intends to further improve its industry-leading operating ratio and return on invested capital, and expects to sustain consistent annual dividend increases. Pricing dollars are projected to exceed inflation, and strong cash generation will support the capital allocation strategy while accommodating a muted economic backdrop.