Union Pacific Stock Earnings Reports

Union Pacific reported a strong Q3 2025 driven by pricing, operational efficiency and productivity gains. Adjusted EPS was $3.08 (excluding $41M of merger costs), up 12% year-over-year, and the adjusted operating ratio improved 180 bps to 58.5%. Freight revenue ex-fuel grew for the sixth consecutive quarter and several operational records were set (workforce productivity, fuel consumption rate, terminal dwell, train line, car velocity). Cash from operations was robust ($7.1B YTD in Q3) and the company paid down $1B of long-term debt, lowering adjusted debt/EBITDA to 2.6x; share repurchases remain paused while debt reduction and merger priorities take precedence. Management reaffirmed its multi-year targets (high-single to low-double digit EPS CAGR) while noting near-term headwinds: Q4 volumes running down ~6% largely from international intermodal, continuing merger-related costs, and paused buybacks that will weigh on near-term EPS comparisons to last year's record quarter. On the merger with Norfolk Southern, management emphasized customer, labor and regulator engagement, signed labor agreements in principle (SMART-TD), significant shipper support (400+ customer letters), and an intent to file the STB application imminently (management indicated a target of end of November / early December). The team emphasized maintaining service buffers (locomotives, crews, cars) and being nimble operationally to protect service while adjusting cost and fleet as volumes shift. Management expects the combined franchise to improve speed, reduce touch points and create competitive advantages versus trucks and alternative trade routes. Capital and financing plans are in progress to support the transaction and the company's long-term investment program; management plans to prioritize debt paydown and aims to resume buybacks in year 2 post-close (targeting 2028 in current planning).