Core Viewpoint - Union Pacific Corporation is a leading player in the railroad industry, showcasing strong financial performance and a commitment to shareholder returns, despite facing some challenges in the competitive market environment. Financial Performance - Union Pacific reported a record net income of $7.1 billion in 2025, reflecting a 6% increase from the previous year, with earnings per share (EPS) rising by 8% to $11.98 [2][6] - The company's freight revenue, excluding fuel surcharge, grew by 3%, achieving a new full-year record, while the operating ratio improved by 60 basis points to 59.3%, indicating enhanced efficiency [3] Shareholder Returns - The company distributed $5.9 billion through dividends and share repurchases, marking a 25% increase from 2024, demonstrating its commitment to returning value to shareholders [4][6] Market Challenges - In the fourth quarter of 2025, Union Pacific faced a 1% decrease in operating revenue compared to 2024, with freight revenue also declining by 1% due to a 4% drop in volume [5] - The company continues to navigate a competitive market environment but maintains a strong financial foundation and strategic initiatives for future growth [5] Price Target - Goldman Sachs set a price target of $267 for Union Pacific, suggesting a potential increase of 14.81% from its current price of $232.55, supported by the company's strong financial outlook [2][6]

Core Viewpoint - Union Pacific Corporation is facing challenges in revenue growth despite maintaining a focus on operational efficiency and future investments [1][4][6] Financial Performance - Union Pacific reported earnings per share of $2.86, missing the Zacks Consensus Estimate of $2.90, representing a 1.7% year-over-year decline [2][6] - Operating revenues were $6.08 billion, below the expected $6.14 billion, reflecting a 1% decline from the previous year [2][6] Revenue Challenges - The decline in revenues was primarily due to lower volume, with a 4% year-over-year decrease in revenue carloads [3][6] - Freight revenue was impacted by a drop in Premium volumes, although there were gains in the Bulk and Industrial segments [3] Operational Efficiency - Union Pacific achieved a lower operating ratio, indicating improved efficiency [4] - The company has guided for mid-single-digit EPS growth and plans capital expenditures of approximately $3.3 billion in 2026, focusing on operational performance and future growth [4][6] Stock Performance - Union Pacific's stock is currently trading at $232.55, with a slight increase of 0.72%, and has a market capitalization of approximately $137.94 billion [5]

Core Insights - Union Pacific Corporation (UNP) reported disappointing fourth-quarter 2025 results, with earnings and revenues missing the Zacks Consensus Estimate [1][9] Financial Performance - Quarterly earnings (excluding 25 cents from non-recurring items) were $2.86 per share, missing the Zacks Consensus Estimate of $2.90 and decreasing 1.7% year-over-year [1] - Operating revenues were $6.08 billion, missing the Zacks Consensus Estimate of $6.14 billion and falling 1% year-over-year due to lower volume, partially offset by core pricing gains and fuel surcharge revenue [2] - Revenue carloads declined 4% year-over-year, with freight revenues (94.5% of total revenues) falling 1% year-over-year to $5.75 billion [2] - Operating income decreased 5% year-over-year to $2.40 billion, while total operating expenses increased 2% year-over-year to $3.68 billion [3] - The operating ratio improved by 190 basis points year-over-year to 60% on an adjusted basis [3] Segment Performance - Bulk freight revenues increased 3% year-over-year to $1.91 billion, with segmental revenue carloads also up 3% [4] - Industrial freight revenues rose 1% year-over-year to $2.11 billion, with segmental revenue carloads increasing 1% [4] - Premium division freight revenues decreased 6% year-over-year to $1.72 billion, with premium revenue carloads down 10% [5] Liquidity and Financial Outlook - Union Pacific ended Q4 2025 with cash and cash equivalents of $1.26 billion, up from $808 million in the prior quarter, while debt remained flat at $30.29 billion [6] - For 2026, earnings per share are expected to grow in the mid-single digits, with capital expenditure projected at approximately $3.3 billion [7] - The company aims to improve its operating ratio and continue generating strong cash while increasing annual dividend payouts [7]

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“The Union Pacific team delivered our best ever full year across safety, service and operating excellence,” Chief Executive Jim Vena said on the railroad’s earnings call on Tuesday morning. “As we close out the year, it’s clear the team is consistently delivering at the highest levels, and I’m confident that’s what we’ll continue to do.” For the year, the Omaha-based company (NYSE: UNP) said operating income rose 1%, to $9.8 billion, as revenue rose 1%, to $24.5 billion. Overall volume also was up 1%. Ea ...

Union Pacific (UNP) reported $6.09 billion in revenue for the quarter ended December 2025, representing a year-over-year decline of 0.6%. EPS of $2.86 for the same period compares to $2.91 a year ago.The reported revenue compares to the Zacks Consensus Estimate of $6.14 billion, representing a surprise of -0.82%. The company delivered an EPS surprise of -1.47%, with the consensus EPS estimate being $2.90.While investors scrutinize revenue and earnings changes year-over-year and how they compare with Wall St ...

Core Insights - Union Pacific reported a higher profit in the fourth quarter despite a slight decline in revenue due to lower volumes [1] Financial Performance - The company experienced a profit increase in the fourth quarter [1] - Revenue fell slightly, indicating a headwind from lower volumes [1]

Core Viewpoint - Union Pacific reported quarterly earnings of $2.86 per share, missing the Zacks Consensus Estimate of $2.9 per share, and showing a decline from $2.91 per share a year ago, indicating an earnings surprise of -1.47% [1] Financial Performance - The company posted revenues of $6.09 billion for the quarter ended December 2025, missing the Zacks Consensus Estimate by 0.82%, and down from $6.12 billion year-over-year [2] - Over the last four quarters, Union Pacific has surpassed consensus EPS estimates two times and topped consensus revenue estimates two times [2] Stock Performance - Union Pacific shares have lost about 0.2% since the beginning of the year, while the S&P 500 has gained 1.5% [3] - The current status translates into a Zacks Rank 3 (Hold) for the stock, indicating expected performance in line with the market in the near future [6] Earnings Outlook - The current consensus EPS estimate for the coming quarter is $2.94 on revenues of $6.14 billion, and for the current fiscal year, it is $12.38 on revenues of $25.43 billion [7] - The estimate revisions trend for Union Pacific was mixed ahead of the earnings release, which could change following the recent report [6] Industry Context - The Transportation - Rail industry is currently in the bottom 16% of the Zacks industries, suggesting that the outlook for the industry can materially impact stock performance [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]

Financial Data and Key Metrics Changes - Union Pacific reported a full-year net income of $7.1 billion, an increase of 6%, and earnings per share of $11.98, up 8% compared to 2024 [9] - The adjusted operating ratio improved by 60 basis points to 59.3% versus 2024 [10] - Full-year cash from operations totaled $9.3 billion, roughly flat compared to 2024, while cash return to shareholders grew by 25% to $5.9 billion [16] Business Line Data and Key Metrics Changes - In the fourth quarter, operating revenue was $6.1 billion, a decrease of 1% year-over-year, with freight revenue of $5.8 billion also down 1% on a 4% lower volume [12] - Bulk segment revenue increased by 3% due to a 3% increase in volume, while industrial revenue was up 1% on a 1% increase in volume [18][19] - Premium revenue declined by 6% despite a 10% increase in volume, reflecting business mix and higher fuel surcharges [19] Market Data and Key Metrics Changes - The competitive and global market environment impacted pricing and mix, particularly in agricultural sectors [12] - Domestic intermodal volumes faced challenges due to lower West Coast imports and customer shifts, although 2025 was the best-ever year for domestic intermodal [20] - The outlook for 2026 indicates a softer environment, with industrial production forecasted to be flat and housing starts expected to decline by more than 2% [21][22] Company Strategy and Development Direction - The company aims to maintain a strong focus on safety, service, and operational excellence to drive growth [30] - Capital spending for 2026 is targeted at approximately $3.3 billion, prioritizing core infrastructure and modernization of the locomotive fleet [28] - The merger with Norfolk Southern is expected to enhance competition and improve service delivery, with a focus on regulatory compliance [40][41] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in operational capabilities despite a challenging economic backdrop, with expectations for mid-single-digit earnings growth in 2026 [33] - The company anticipates inflation to exceed 4% in 2026, impacting margins, but remains committed to improving operating ratios [32] - Management highlighted the importance of maintaining a buffer of resources to adapt to market conditions and customer demands [61] Other Important Information - The company achieved best-ever results in safety performance, with significant improvements in personal injury and derailment rates [25] - The merger application with Norfolk Southern is undergoing additional scrutiny, with expectations to resubmit soon [40][88] Q&A Session Summary Question: How will the company improve operating ratio in 2026 given inflation and pricing challenges? - Management indicated that improvements will come from productivity gains and a more favorable business mix, despite not expecting price increases to contribute positively [46][47] Question: Can you elaborate on the $2 billion targeted net revenue gains from the merger? - Management expressed confidence in the projected traffic growth and emphasized that the operational efficiency will handle the increased traffic effectively [53][56] Question: What is the outlook for capital expenditures and growth into 2027? - Management clarified that capital expenditures are aligned with network needs and emphasized a conservative approach to growth expectations for 2027 [68][70]

Union Pacific (NYSE:UNP) Q4 2025 Earnings call January 27, 2026 08:45 AM ET Company ParticipantsAndre Kelleners - Managing DirectorsBrian Ossenbeck - Managing DirectorChris Wetherbee - Managing DirectorElliot Alper - VP of Equity ResearchEric Gehringer - EVP of OperationsJennifer Hamann - CFOJim Vena - CEOJonathan Chappell - Senior Managing DirectorKen Hoexter - Managing DirectorKenny Rocker - EVP of MarketingStephanie Moore - SVP of Equity ResearchNone - Video NarratorConference Call ParticipantsAri Rosa - ...