Union Pacific (UNP) Q4 2024 earnings summary

Executive summary

• Fourth quarter 2024 net income was $1.8 billion ($2.91 per share), up 7% year-over-year, capping a year of strong financial and operational performance with record productivity and improved safety metrics.

• Full-year 2024 net income reached $6.7 billion ($11.09 per share), up 6%, with operating income up 7% to $9.7 billion and revenue up 1% to $24.3 billion.

• Achieved 5% volume growth and notable efficiency improvements, especially in Intermodal, Grain, and Industrial Chemicals.

• Operating ratio improved to 58.7% in Q4 and 59.9% for the year, both showing over 200 basis points improvement from 2023.

• Enhanced network fluidity and service quality while managing increased volumes.

Financial highlights

• Q4 operating revenue was $6.1 billion, down 1% year-over-year, with freight revenue flat at $5.8 billion; excluding fuel surcharges, freight revenue grew 4%.

• Operating expenses declined 4% to $3.6 billion despite a 5% increase in volume; fuel expense dropped 23% due to lower prices.

• Free cash flow for 2024 was $2.8 billion, up from $1.5 billion in 2023; cash from operations reached $9.3 billion.

• Dividends paid totaled $3.2 billion in 2024, with dividends per share up 2% to $5.28.

• Adjusted debt to EBITDA improved to 2.7x from 3.0x year-over-year; adjusted debt at year-end was $32.5 billion.

Outlook and guidance

• 2025 guidance targets high single-digit to low double-digit EPS growth, consistent with three-year CAGR targets.

• Capital spending planned at $3.4 billion, flat year-over-year, focused on infrastructure, fleet modernization, and capacity projects.

• Share repurchases planned at $4.0–$4.5 billion; dividend payout ratio to remain around 45% of earnings.

• 2025 volume expected to be impacted by mixed economic conditions, coal demand, and tough international intermodal comparisons.

• Inflation (excluding fuel) expected at 3.5%; fuel price assumption at $2.50/gallon; tax rate at 24%.