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 - ...

CSX said Thursday that its profit slipped 2% in the fourth quarter as the railroad dealt with weak demand and severance costs from layoffs that new CEO Steve Angel carried out last fall. The Jacksonville, Florida-based railroad said it earned $720 million, or 39 cents per share, in the quarter. That's down from $733 million, or 38 cents per share. But the results were weighed down by about $50 million in one-time costs that drug down profits by 2 cents per share. Without that, the numbers would have bee ...

Core Viewpoint - Union Pacific Corporation is actively promoting its proposed merger with Norfolk Southern, aiming to establish the first transcontinental railroad in the U.S. and addressing misinformation from opponents [1] Company Developments - Union Pacific and Norfolk Southern submitted their application to the Surface Transportation Board for merger approval [1] - The meeting at the Midwest Association of Rail Shippers (MARS) served as a platform for Union Pacific to engage with customers regarding the merger benefits [1]

Core Viewpoint - Union Pacific and Norfolk Southern have filed a joint application for an $85 billion merger, aiming to create the first modern transcontinental railroad in the U.S. [1] Group 1: Merger Details - The merger application is approximately 7,000 pages long and argues that the deal will enhance competition by simplifying and standardizing pricing for shipments between the two networks [1] - The merger is expected to transform "tens of thousands" of interline lanes into single-line services, converting over 2 million truckloads of traffic to rail annually [3] Group 2: Competitive Advantage - A single-line service from the merger would allow railroads to compete more effectively with long-haul trucking, improving service reliability compared to interline services [2] - The combined companies anticipate reducing an estimated 2,400 daily rail car and container handlings, saving approximately 60,000 car miles per day, which could eliminate delays [3] Group 3: Regulatory Process - The Surface Transportation Board (STB) has 30 days to decide on the acceptability of the filing, followed by a 45-day window for public comments and a 90-day window for responsive applications if accepted [3] - The full review process for the merger is expected to extend into 2027 [4] Group 4: Opposition and Concerns - The Teamsters Rail Conference, representing nearly 20,000 workers from both railroads, has voiced opposition, stating that executives have not made commitments to protect union jobs [5]

Summary of Union Pacific and Norfolk Southern Merger Conference Call Industry and Companies Involved - **Industry**: Rail Transportation - **Companies**: Union Pacific and Norfolk Southern Core Points and Arguments 1. **Merger Application Submission**: Union Pacific and Norfolk Southern submitted a comprehensive application to the Surface Transportation Board (STB) for merger approval, consisting of nearly 7,000 pages, highlighting the merger's potential benefits for stakeholders [3][4][5] 2. **Safety and Operational Excellence**: Both companies aim to lead the industry in safety, with Union Pacific expecting to end the year as the safest railroad and Norfolk Southern as the industry leader in mainline and community safety [4][6] 3. **Economic Impact**: The merger is positioned as a pivotal opportunity to enhance America's competitiveness, improve freight movement, and strengthen the U.S. supply chain by removing over 2 million truckloads from highways, thereby reducing emissions and road congestion [5][6] 4. **Customer Benefits**: The merger will provide customers with faster, more reliable single-line service, transforming 10,000 existing lanes from interline to single-line service, which will reduce delays and improve asset utilization [12][13] 5. **Job Creation**: The merger is expected to create approximately 900 new net union jobs by the end of the third year, with an annual pay and benefit package of $160,000, which is about 40% above the national industrial average [6][7] 6. **Market Share Dynamics**: The merger aims to reverse the decline in rail market share, which has decreased by nearly 10 points from 2014 to 2023, by converting approximately 75% of freight to rail from highways [9][10] 7. **Intermodal Growth**: The combined intermodal business is projected to grow by over 1.4 million annual loads, with new routes that significantly reduce transit times [15][16] 8. **Environmental Benefits**: The merger is expected to remove 2.7 million metric tons of carbon dioxide emissions annually, reinforcing rail as a more sustainable transportation option compared to trucks [38][39] 9. **Financial Projections**: The merger is projected to generate up to $2 billion in net revenue EBITDA synergies by the end of year three, with nearly $1 billion in cost-saving opportunities across various categories [41][42] 10. **Commitment to Competition**: The merger is designed to enhance competition, with commitments to preserve open gateways and provide competitive rates through committed gateway pricing [21][22] Other Important but Overlooked Content 1. **Operational Changes**: The merger will allow for significant operational changes, including rerouting traffic to reduce congestion, particularly in key areas like Chicago, which has historically been a bottleneck [72][74] 2. **Technology Integration**: Union Pacific plans to leverage its advanced technology systems to ensure seamless integration post-merger, maintaining service stability during the transition [31][32] 3. **Stakeholder Support**: The merger has garnered support from over 2,000 parties, including more than 500 shippers and 800 public officials, indicating broad industry backing [45][46] 4. **Phased Integration Approach**: The integration of the two companies will be executed in phases to minimize disruption and ensure reliability [30][32] 5. **Expert Analysis**: The merger's benefits have been validated by leading economists and rail experts, who have provided insights into the competitive and economic impacts of the transaction [36][37] This summary encapsulates the key points discussed during the conference call regarding the merger between Union Pacific and Norfolk Southern, emphasizing the anticipated benefits, operational changes, and the broader implications for the rail industry and the U.S. economy.

Summary of Union Pacific and Norfolk Southern Merger Conference Call Industry and Companies Involved - **Industry**: Rail Transportation - **Companies**: Union Pacific (NYSE: UNP) and Norfolk Southern (NYSE: NSC) Core Points and Arguments 1. **Merger Application Submission**: Union Pacific and Norfolk Southern submitted a comprehensive merger application to the Surface Transportation Board (STB) consisting of approximately 7,000 pages, highlighting the merger's potential benefits and compliance with STB requirements [3][4][5] 2. **Safety and Operational Excellence**: Both companies aim to lead the industry in safety, with Union Pacific expecting to end the year as the safest railroad and Norfolk Southern as the industry leader in mainline and community safety [4][6] 3. **Economic Impact**: The merger is positioned as a pivotal opportunity to enhance America's competitiveness, improve freight service, and create jobs, with the potential to remove over 2 million truckloads from highways, thereby reducing emissions and road congestion [5][6] 4. **Customer Benefits**: The merger will provide customers with faster, more reliable single-line service, reducing delays caused by handoffs and improving asset utilization. It is expected to transform 10,000 existing lanes from interline to single-line service [12][13][14] 5. **Volume Growth**: The combined network is projected to add approximately 900 new net union jobs and generate significant volume growth, with estimates of 1.4 million annual intermodal loads and 425,000 carloads of merchandise, bulk, and automotive products [6][16][18] 6. **Competitive Landscape**: The merger is expected to enhance competition within the rail industry and against trucking, with 75% of the freight converted to the combined railroad anticipated to come from highways [9][20] 7. **Environmental Benefits**: The merger is projected to significantly reduce carbon emissions, with the potential to eliminate 2.7 million metric tons of CO2 annually, reinforcing rail as a more sustainable transportation option compared to trucking [40][41] 8. **Financial Projections**: The merger is expected to yield up to $2 billion in net revenue EBITDA synergies by the end of year three, with nearly $1 billion in cost-saving opportunities across various categories [42][43] Other Important but Potentially Overlooked Content 1. **Commitment to Jobs**: Every employee with a union job at the time of the merger will retain their position, with a commitment to add new jobs that offer an annual pay and benefit package of $160,000, which is approximately 40% above the national industrial average [6][7] 2. **Operational Changes**: The merger will streamline operations by reducing the number of handlings and improving routing efficiency, which is expected to result in nearly 900,000 fewer handlings and a reduction of approximately 22,000 car miles annually [27][31] 3. **Technology Integration**: Both companies have modernized their operating systems, which will facilitate a seamless integration post-merger, ensuring service stability and continuity for customers [32][33] 4. **Stakeholder Support**: The merger has garnered support from over 2,000 parties, including more than 500 shippers and 800 public officials, indicating a broad consensus on the merger's potential benefits [46][47] 5. **Phased Integration Plan**: The integration of the two companies will be executed in phases to ensure reliability and effectiveness, with a focus on maintaining a resource buffer to manage challenges [31][48] This summary encapsulates the key points discussed during the conference call regarding the merger between Union Pacific and Norfolk Southern, emphasizing the anticipated benefits, competitive dynamics, and operational strategies.

Core Viewpoint - The proposed $85 billion merger between Union Pacific and Norfolk Southern railroads faces significant opposition from two major unions, raising concerns about safety, job security, shipping rates, and competition [1][2]. Union Opposition - The Brotherhood of Locomotive Engineers and Trainmen and the Brotherhood of Maintenance of Way Employes Division have expressed strong criticism, fearing the merger will jeopardize jobs and safety while increasing costs for consumers [2][6]. - These unions are joining other stakeholders, including the American Chemistry Council and agricultural groups, in opposing the merger due to concerns about reduced competition [2]. Support for the Merger - The merger has backing from the largest rail union representing conductors and individual shippers, as well as support from President Donald Trump, who views the deal favorably [3][7]. - Union Pacific CEO Jim Vena argues that the merger would enhance economic efficiency by eliminating the need for hand-offs between railroads, thus speeding up shipments [4]. Job Security Concerns - Union Pacific has stated that all employees with union jobs at the time of the merger will retain their positions, formalizing a jobs-for-life agreement with five unions [5]. - However, there are concerns that job numbers could still decline through attrition, as employees may leave voluntarily [5]. Safety and Service Quality - Unions worry that the merger could lead to a decline in safety standards, particularly given Union Pacific's slower improvements compared to Norfolk Southern since a major derailment incident [6]. - Critics argue that the merger could result in less attractive rail shipping options, as the merged entity may offload less profitable lines to smaller railroads [6]. Regulatory Scrutiny - The U.S. Surface Transportation Board will conduct a stringent review of the merger under a new standard established in 2001, requiring that it serves the public interest and enhances competition [8]. - The merger's potential to create a monopoly is a significant concern, with experts suggesting it could lead to only two major American railroads [9][10]. Competitive Landscape - A merged Union Pacific could control over 40% of the nation's freight, raising alarms about the implications for competition and pricing in the rail industry [10]. - Competitors like BNSF argue that the merger would lead to higher rates and fewer options for shippers, emphasizing that no customer has requested such a merger [11].

Union Pacific Conference Call Summary Company Overview - **Company**: Union Pacific (NYSE: UNP) - **Date**: December 02, 2025 - **Speakers**: Jim Vena (CEO), Jennifer Hamann (CFO), Kenny Rocker (CMO) Key Points Merger Application and Financial Position - Union Pacific is in the process of completing a merger application with Norfolk Southern, valued at **$85 billion** [9] - The company has ensured it is financially stable and operationally efficient before proceeding with the merger [3][5] - The merger is expected to enhance operational capabilities and customer service [10][12] Operational Improvements - Union Pacific has improved its decision-making culture, allowing local teams to make operational decisions [6][7] - The company has successfully reduced touch points on rail cars, leading to faster network operations and increased resiliency [7][8] - The operational metrics have shown significant improvements, including a record freight car velocity of **245 miles per day** [19] Market Dynamics and Volume Trends - The company has seen strong performance in coal and grain sectors, while facing challenges in domestic intermodal volumes, which are down **4-5%** [18][24] - Overall volumes are down **4%** quarter-to-date, with expectations for a challenging fourth quarter due to unfavorable mix and merger costs of **$30 million-$40 million** [21][24] Competitive Landscape - Union Pacific aims to enhance competition by providing faster and more efficient service, particularly in intermodal transport, which is currently underserved [61][62] - The merger is expected to create new market opportunities and improve service offerings, particularly in regions with limited competition [60][64] Pricing Strategy - The company maintains a disciplined pricing strategy, balancing the need for price increases with the importance of service quality [41][77] - Union Pacific is focused on growing its business while managing costs effectively, particularly in light of inflation pressures expected to be around **3.5-4%** [36][37] Future Outlook - Union Pacific is optimistic about its position in the market, expecting to lead the industry in operating ratio and return on invested capital by the end of 2025 [22][30] - The company is actively working on its 2026 plan, with a focus on enhancing service and operational efficiency post-merger [35][36] Additional Insights - The merger is seen as beneficial not only for Union Pacific but also for the broader U.S. economy, facilitating smoother transportation of goods across the country [13][12] - Union Pacific is committed to maintaining strong relationships with customers and partners, emphasizing collaboration over competition [67][68] Conclusion Union Pacific is strategically positioning itself for a successful merger with Norfolk Southern, focusing on operational efficiency, market expansion, and maintaining a competitive edge through improved service offerings and disciplined pricing strategies. The company remains optimistic about its future performance despite current volume challenges.

Core Viewpoint - The proposed merger between Union Pacific and Norfolk Southern is seen as potentially disruptive and unlikely to benefit shippers or carriers, according to BNSF Railway [1]. Industry Impact - The merger is pitched as a means to enhance freight movement efficiency by reducing delays and costs associated with transferring freight between railroads at congested hubs [2]. - A combined UP-NS railroad could reshape the North American rail network, which raises concerns among other Class I railroads that rely on sharing freight with competitors [3]. Customer Concerns - BNSF's executive expressed that the merger would limit competitive options for customers, particularly in carload shipping, by reducing the number of transcontinental railroads available [4]. - Analysts estimate that the merged entity would control nearly 50% of U.S. rail freight, including significant shares of container traffic (45%), automotive shipments (47%), and metals transport (56%) [5]. Customer Sentiment - BNSF noted that its customers are not advocating for the merger, suggesting a disconnect between industry consolidation and customer needs [6]. - The response to the merger will depend on the specifics of the filing with the Surface Transportation Board, which is expected in early December [7].

Core Viewpoint - The proposed $85 billion merger between Union Pacific and Norfolk Southern aims to create the first coast-to-coast rail network in the U.S., receiving overwhelming shareholder support but still requiring approval from the U.S. Surface Transportation Board [1][2]. Company Overview - Union Pacific CEO Jim Vena expressed confidence that the merger will unlock new opportunities for service, growth, and innovation, with plans to file a formal application by late November or early December [2]. - The merger is designed to connect Union Pacific's extensive Western network with Norfolk Southern's Eastern rail lines, resulting in over 50,000 miles of track across 43 states and access to major ports on both coasts [4]. Industry Impact - The merger has garnered support from the largest rail union and numerous shippers, although concerns have been raised by chemical manufacturers and competitor BNSF regarding potential negative impacts on competition and increased rates [3]. - The merger is expected to streamline the delivery of goods and raw materials nationwide by reducing delays during inter-railroad shipments [5]. Regulatory Environment - The U.S. Surface Transportation Board will conduct a thorough review of the merger, which must meet high standards established after previous industry consolidations caused significant operational issues [5]. - The merger's approval is anticipated to be influenced by the current pro-business administration, with historical context suggesting potential political dynamics affecting the board's decisions [7]. Financial Details - The merger proposal includes a cash offer of $20 billion and stock exchange terms, valuing Norfolk Southern at approximately $320 per share, with a breakup fee of $2.5 billion [8].