Union Pacific's Q4 Earnings & Revenues Lag Estimates, Down Y/Y

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]