Union Pacific Operating Revenue Reaches $7.2 Billion, Up 15% in Third Quarter
Key Facts
Union Pacific reported operating revenue of $7.2 billion in the third quarter, up 15% year over year, according to the company’s results. Net income rose to $2,076 million, compared with $1,788 million in the year-earlier period, marking growth of 16%. The company said revenue benefited from higher fuel surcharges, growth in freight volume, core pricing gains and higher other revenue. Business mix partly offset these supporting factors. The results reflect expanding activity and revenue alongside operating pressures related to fuel costs.
Freight volume rose 6% during the quarter, according to a Union Pacific statement, while adjusted earnings per share of $3.53 exceeded analysts’ estimate of $3.47. Still, the stock fell 1.20% in premarket trading on October 22, according to coverage reporting the results. Activity details showed growth in intermodal, metals and industrial products, energy, premium freight, grain and grain products. This was partly offset by a decline in coal carloads. CEO Jim Vena said the company delivered the service it sold to customers and handled volume growth efficiently, adding that consistent execution enabled "record financial results."
The reported operating ratio improved 10 basis points to 59.1%, while the adjusted operating ratio rose 30 basis points to 58.8%, according to the company. It said higher fuel prices had a negative impact of 140 basis points on the operating ratio. This means the improvement in the reported measure coincided with a decline in the adjusted measure, while fuel costs remained a drag on operating efficiency. On productivity, freight car speed was 228 miles per day, up 1%. Average train terminal dwell time also improved 2% to 19.9 hours, and workforce productivity rose 5% to 1,219 car miles per employee.
The company maintained its outlook for high-single-digit growth in reported earnings per share in 2026. It said this trajectory is consistent with its 3-year compound annual earnings-per-share growth target, from high single digits to low double digits through 2027. This guidance places the earnings outlook within a framework extending beyond the current year. At the same time, the company links its operating results to volume growth, core pricing and other revenue, while noting the effects of business mix and fuel prices. Fuel costs remain among the factors that affected the operating ratio during the quarter.
During the first nine months of 2026, Union Pacific generated $8.3 billion in cash from operations, invested $2.8 billion in capital, and repaid $1.5 billion of debt. Free cash flow, as defined by the company, was $2.4 billion through September 30. The adjusted debt-to-adjusted earnings before interest, taxes, depreciation and amortization ratio also stood at 2.4 times in the third quarter. These figures show cash flows, investment and debt repayment over the same period. They provide financial context for the operating results and spending outlined in the company’s announcement.
The review of the Union Pacific and Norfolk Southern merger by the Surface Transportation Board remains an active regulatory process. On September 18, 2026, the board rejected motions for summary dismissal of the amended merger application, but said its decision did not resolve the merits of the transaction. The decision also allowed the parties to renew their arguments in comments on the application. The board set November 18, 2026, as the deadline for comments, including protests, requests to impose conditions, evidence and opposing arguments. It set February 16, 2027, as the deadline for replies to those comments.