UP drives up revenue and income, drives down operating ratio in Q3

This morning, Union Pacific Corp. reported encouraging third-quarter financial results that include higher revenue, income and earnings. 

Operating revenue ticked up 3% to $6.2 billion, freight revenue (excluding fuel) increased 4% to $5.3 billion, operating income rose 6% to $2.5 billion, net income climbed 7% to $1.8 billion, diluted earnings per share (EPS) shot up 9% to $3.01 and the operating ratio improved 1.1 points to 59.2 compared with third-quarter 2024 results. Operating expenses rose only 1% to $3.7 billion. 

By commodity sector, bulk revenue and volume both increased by 7% to $1.9 billion and 530,000 units, respectively; industrial revenue and volume both increased 3% to $2.2 billion and 574,000 units, respectively; and premium revenue rose 2% to $1.8 billion and volume climbed 5% to 1.05 million units. 

The quarterly performance was driven by strong core pricing gains, continued operational efficiencies, and enhanced service and business development efforts, UP officials said in a press release. The results demonstrate the success of the company’s strategic focus, which bodes well for the ongoing effort to acquire Norfolk Southern Railway, they added. 

"Our third quarter results serve as a proof point that we are successfully executing on our strategy," said UP CEO Jim Vena. "We have a historic opportunity with the Norfolk Southern to create America's first transcontinental railroad. As we work towards regulatory approval, our team is focused and driving continued improvements in our pursuit of what's possible.” 

In terms of UP’s operational and safety performance in Q3, the reportable personal injury and derailment rates improved, freight-car velocity rose 8%, locomotive productivity increased 4%, workforce productivity improved 6% and average terminal dwell time declined 9%. 

Through 2025’s first three quarters, the Class I is on track with its ongoing financial targets, such as EPS growth that’s consistent with a three-year goal of high single to low double-digit percentage gains, an industry-leading operating ratio and a 2025 capital plan of $3.4 billion, UP officials said.