Union Pacific Stock Earnings Reports

Union Pacific reported a strong start to 2026 with record first-quarter results: net income of $1.7 billion (up 5%), GAAP EPS of $2.87 (up 6%), adjusted EPS of $2.93 (up 9% ex-merger costs), and an operating ratio of 59.9% (80 bps improvement). Freight revenue rose 4% despite 1% lower volumes, driven by core pricing, business mix, and higher fuel surcharge revenue. Key segment takeaways: bulk (coal and grain) and industrial deliveries were notably strong; domestic intermodal set another record while international intermodal remained pressured by lower West Coast imports; automotive and forest products showed softness. Operating performance was excellent — best-ever quarter for several KPIs (e.g., freight car velocity, terminal dwell, locomotive productivity) and a 7% workforce productivity gain enabling a smaller workforce. Cash flow was robust: operating cash of $2.4 billion (+10% YoY), free cash flow of $630 million, net debt reduced by $1.2 billion, and adjusted debt/EBITDA of 2.5x. Management reaffirmed 2026 guidance (mid-single-digit reported EPS growth and operating ratio improvement) and reiterated a multi-year target of high single-digit to low double-digit EPS CAGR through 2027. The management team is moving forward with a revised merger filing (to the STB on April 30), expressing increased conviction in the deal’s strategic and financial merits while committing to protect union jobs and promising to operate the existing business at a high level during review. Principal near-term risks: fuel-price volatility (noted as a headwind, especially in Q2) and ongoing macro/end-market uncertainty (housing, autos, international trade flows).