EL7.AI
StocksMedium•24 October 2026•
3 min read

Union Pacific Freight Revenue Jumps 15% to Record $6.8 Billion

Key Facts

1Freight revenue rose 15% to a record $6.8 billion in the third quarter of 2026.
2Net income increased 16% to $2.1 billion, and diluted earnings per share rose 16% to $3.49.
3The average fuel price rose from $2.56 to $4.21 per gallon, and fuel expense increased 69%.
4The adjusted operating ratio rose 30 basis points to 58.8%, and higher fuel costs negatively affected it by 140 basis points.
5The deadline for comments on the amended merger application is November 18, 2026, and the deadline for replies is February 16, 2027.

Union Pacific reported a 15% increase in freight revenue to a record $6.8 billion in the third quarter of 2026, while revenue excluding fuel surcharges rose 6% to a record $5.6 billion. Net income increased 16% to $2.1 billion, and diluted earnings per share climbed 16% to $3.49. CEO Jim Vena said the company handled 6% volume growth efficiently while continuing to deliver the service it had sold to customers. The results put strong revenue and earnings growth alongside higher fuel costs that affected operating efficiency. The company’s shares closed at $292.87 on October 23, according to EL7 data.

Revenue growth came from volume expansion and pricing, with performance varying across freight segments. Premium revenue rose 21% as volume increased 9%, while industrial revenue climbed 14% on 6% volume growth. Bulk revenue rose 10% despite flat volume, supported by strong grain export demand. That was offset by a 3% decline in coal and renewables volume. The company said volume growth, pricing strength and operational execution contributed to record results, while the business mix limited revenue growth.

Fuel costs were a headwind in the results: the average price per gallon was $4.21 in the third quarter, compared with $2.56 a year earlier, and fuel expense rose 69%. The company said higher fuel prices negatively affected the operating ratio by 140 basis points. The reported operating ratio improved 10 basis points to 59.1%, while the adjusted ratio rose 30 basis points to 58.8%. The differing direction of the two ratios reflects the effect of fuel costs on the adjusted measure of operating performance, despite revenue and earnings growth. The CEO said higher fuel prices give railroads a cost advantage in moving freight over long distances, while a Reuters report noted that shipments were shifting from roads to trains amid rising trucking costs and a shortage of available trucks.

The company recorded improvements in freight movement and productivity metrics during the quarter. Freight car velocity increased 1% to 228 miles per day per car, and average terminal dwell improved 2% to 19.9 hours. Workforce productivity also increased 5% to 1,219 car miles per employee. These metrics support management’s account of keeping pace with volume growth while maintaining service, alongside pricing-supported revenue growth. Before the results were announced, analysts had expected adjusted earnings of $3.47 per share and revenue of $7.14 billion; adjusted earnings per share came to $3.53 and revenue to $7.2 billion, but the stock fell 1.20% in premarket trading on October 22.

Union Pacific maintained its outlook for high-single-digit reported earnings-per-share growth in 2026 and a high-single-digit to low-double-digit compound annual growth target through 2027. The company raised its capital spending plan to $3.5 billion. The outlook comes as markets follow the U.S. Surface Transportation Board’s review of its merger application with Norfolk Southern. The board set November 18, 2026, as the deadline for comments on the amended application, including objections, requests for conditions and any opposing briefs. It also set February 16, 2027, as the deadline for replies, and said the date of the public hearing would be set later.