Union Pacific (UNP) Q2 2025 earnings summary

Executive summary

• Net income for Q2 2025 was $1.9 billion, up 12% year-over-year, with diluted EPS at $3.15, and adjusted EPS at $3.03, reflecting a $115 million deferred tax benefit and a $55 million labor expense.

• Operating ratio improved to 59.0% from 60.0% year-over-year; adjusted operating ratio was 58.1%, a 230 basis point improvement.

• Volume growth, core pricing gains, and productivity improvements were key drivers, with workforce productivity up 9% and locomotive productivity up 5%.

• Advanced discussions regarding a potential business combination with Norfolk Southern were announced.

• Record performance in freight revenue, operating income, and operational metrics, supported by business development in coal, intermodal, grain, and industrial chemicals.

Financial highlights

• Operating revenue reached $6.2 billion, up 2% year-over-year; freight revenue set a second quarter record at $5.8 billion, up 4%.

• Operating income grew 5% year-over-year to $2.53 billion.

• Cash from operations totaled $4.54 billion year-to-date, up over $500 million year-over-year; free cash flow reached $1.1 billion.

• Returned $4.3 billion to shareholders through share repurchases and dividends.

• Debt/net income ratio was 4.7; adjusted debt/EBITDA was 2.8; cash and equivalents at $1.1 billion at quarter-end.

Outlook and guidance

• 2025 outlook affirmed, with EPS growth on track for high-single to low-double digit 3-year CAGR.

• Capital plan set at $3.4 billion; share repurchases targeted at $4.0–$4.5 billion.

• Third quarter 2025 dividend to increase by 3%.

• Expect third quarter other revenue to be in line with Q2 due to continued softness in autos and lower accessorials; anticipate sequential volume declines in the back half, especially in international intermodal.

• Well-positioned to meet customer demand despite challenging second half intermodal comparisons.