Union Pacific (UNP) Q3 2025 earnings summary

Executive summary

• Net income for Q3 2025 was $1.8 billion, up 7% year-over-year, with diluted EPS of $3.01 and adjusted EPS of $3.08, reflecting $41 million in merger costs.

• Operating income rose 6% to $2.55 billion, driven by strong pricing, operational efficiencies, and productivity gains.

• Operating ratio improved to 59.2% (adjusted 58.5%), with record operational metrics in productivity, fuel consumption, and train length.

• Merger with Norfolk Southern is progressing, supported by customers and unions, with application filing expected by end of November or early December.

• Growth in coal and industrial chemicals supported by enhanced business development.

Financial highlights

• Operating revenue rose 3% year-over-year to $6.24 billion; freight revenue up 3% to $5.9 billion.

• Net income reached $1.8 billion; adjusted EPS $3.08, excluding $41 million in merger costs.

• Free cash flow for the first nine months was $1.86 billion; cash from operations up 6% to $7.1 billion.

• Dividend per share increased 3% in Q3; $2.42 billion paid year-to-date.

• Adjusted operating ratio improved 180 basis points to 58.5%; reported operating income up 6% to $2.5 billion.

Outlook and guidance

• EPS growth is on track for a 3-year CAGR target of high-single to low-double digits.

• Capital plan for 2025 is set at $3.4 billion, focused on network growth, safety, and modernization.

• Share repurchases are paused pending the Norfolk Southern merger.

• Q4 volumes currently down 6% due to tough comps in international intermodal; merger costs and paused share repurchases expected to be headwinds.

• Pending Norfolk Southern acquisition expected to close in early 2027, subject to regulatory and shareholder approvals.