Union Pacific reported adjusted fourth-quarter earnings per share of $2.86, missing the consensus estimate of $2.90, while operating revenues fell 1% year-over-year to $6.08 billion. The revenue shortfall was driven primarily by a 4% decline in volume carloads, as weakness in Premium freight was only partly offset by gains in Bulk and Industrial segments. The adjusted operating ratio deteriorated by 190 basis points to 60.0%, reflecting higher unit costs and lower overall throughput despite modest core pricing gains and fuel surcharge revenue.

For the full year, net income reached a record $7.1 billion, up 6% from 2024, and diluted EPS increased 8% to $11.98. Freight revenue excluding fuel surcharges rose 3%, while total operating revenue grew 1% to $24.5 billion. The company improved its adjusted operating ratio by 60 basis points to 59.3%, driven by broad-based efficiency initiatives: freight car velocity increased 8%, terminal dwell time fell by 8%, and workforce productivity rose 7%. These operational gains underscore management’s focus on cost control and network fluidity.

Union Pacific returned $5.9 billion to shareholders through dividends and share repurchases in 2025, a 25% increase over the prior year. Looking ahead, management plans capital expenditures of approximately $3.3 billion in 2026, emphasizing maintenance-of-way and locomotive upgrades. The company projects mid-single-digit EPS growth next year, consistent with a longer-term target of high-single-digit to low-double-digit CAGR through 2027, and expects continued operating ratio improvements supported by targeted pricing actions and productivity programs.