Union Pacific (UNP) Q4 2025 earnings summary

Executive summary

• Achieved record net income of $7.1 billion (up 6%) and EPS of $11.98 (up 8%) for 2025, with best-ever safety, service, and operational results.

• Delivered significant improvements in freight car velocity, locomotive productivity, and terminal dwell, with notable gains in personal injury and derailment rates.

• Strong core pricing, network fluidity, and volume growth in Coal, Industrial Chemicals & Plastics, and Grain & Grain Products supported performance.

• Maintained operational resilience and resource management during severe weather events.

• Strategic focus on disciplined execution, cost control, and leveraging a diverse franchise for growth.

Financial highlights

• Full-year operating revenue rose 1% to $24.5 billion, with operating income up 1% to $9.8 billion; adjusted operating ratio improved to 59.3%.

• Q4 net income was $1.8 billion (record), with diluted EPS of $3.11; adjusted EPS was $2.86.

• Cash from operations totaled $9.3 billion, with cash returned to shareholders at $5.9 billion via dividends and buybacks.

• Return on invested capital improved to 16.3% from 15.8% in 2024.

• Free cash flow for the year was $2.3 billion.

Outlook and guidance

• 2026 guidance anticipates mid-single-digit EPS growth, with a 3-year CAGR target of high-single to low-double digits through 2027.

• Capital spending planned at $3.3 billion for 2026, prioritizing infrastructure and growth projects, with consistent annual dividend increases.

• Share repurchases paused in anticipation of the Norfolk Southern merger.

• Muted economic forecast for 2026, with pricing expected to exceed inflation.

• Expect to pay off $1.5 billion in long-term debt in early 2026.