First look: Union Pacific earnings

Union Pacific disclosed a 16% growth in third-quarter profit on Thursday, driven by increased freight volumes, pricing improvements, and fuel surcharges. The railroad, based in Omaha, reported earnings of $2.08 billion, or $3.49 per diluted share, compared to $1.79 billion, or $3.01 per share, in the same period last year. Adjusted earnings per share of $3.53 surpassed the $3.47 consensus estimate from Zacks Investment Research.

Operating revenue rose 15% to $7.2 billion, while freight revenue excluding fuel surcharges grew by 6%. Total revenue carloads increased by 6% to 2.29 million. Intermodal volume climbed 11% to 956,000 containers and trailers, with intermodal revenue heading up 27% to $1.52 billion. Industrial volumes increased 6%, while bulk traffic remained essentially flat.

Union Pacific CEO Jim Vena stated in the earnings release, "Union Pacific's third quarter results demonstrate our ability to safely deliver the service we sold to our customers while efficiently handling 6% volume growth." Operating income increased by 15% to $2.94 billion. The operating ratio improved slightly to 59.1% from 59.2%, though the adjusted ratio marginally worsened to 58.8% due to higher fuel prices. Workforce productivity improved by 5%, and average terminal dwell time decreased by 2% to 19.9 hours.

The company reaffirmed its forecast for high-single-digit growth in reported earnings per share for 2026 and revised its capital spending plan to $3.5 billion. Vena also mentioned the upcoming steps in the Surface Transportation Board's review of the proposed merger between Union Pacific and Norfolk Southern (NYSE: NSC).