Union Pacific Reports Strong Third Quarter 2025 Results, Highlights Strategic Momentum and Record Operational Performance
Union Pacific Corporation today announced its financial and operational results for the third quarter of 2025, demonstrating continued momentum in revenue growth, operational efficiency, and safety performance. The company reported net income of $1.8 billion for the quarter, or $3.01 per diluted share. This figure includes $41 million, or $0.07 per diluted share, in costs associated with its ongoing merger activities. On an adjusted basis, third quarter net income rose to $1.8 billion, or $3.08 per diluted share, compared with $1.7 billion, or $2.75 per diluted share, in the same period in 2024.
“Third quarter results are a strong indication that our strategy is yielding meaningful results,” said Jim Vena, Chief Executive Officer of Union Pacific. “We have a historic opportunity with Norfolk Southern to establish America’s first transcontinental railroad. While we await regulatory approval, our team remains focused on delivering continued operational improvements and maximizing shareholder value. The dedication and performance of our workforce continue to drive our progress toward what’s possible in the rail industry.”
Financial Performance: Growth Driven by Revenue and Efficiency
Union Pacific’s third quarter 2025 financial performance reflects solid top-line growth combined with improvements in operating efficiency. Total operating revenue for the quarter reached $6.2 billion, marking a 3% increase over the third quarter of 2024. This growth was primarily driven by core pricing gains across the network, partially offset by a decline in fuel surcharge revenue due to lower energy costs.
Freight revenue, excluding fuel surcharges, rose by 4%, underscoring the company’s ability to drive value through pricing strategies and sustained customer demand. Union Pacific achieved a reported operating ratio of 59.2%, representing an improvement of 110 basis points compared to the prior year. On an adjusted basis, excluding merger-related costs, the operating ratio improved 180 basis points to 58.5%, reflecting enhanced efficiency and disciplined cost management.
These results reinforce Union Pacific’s position as a leading freight railroad operator in North America, demonstrating resilience in a competitive marketplace while maintaining strong profitability.
Operational Excellence: Setting Records Across Key Metrics
Union Pacific continued to advance its operational priorities in the third quarter, achieving record performance across several critical measures of productivity and service.
Safety and Service Performance:
- Reportable personal injury rates improved, reflecting a sustained focus on workplace safety.
- Reportable derailment rates also declined, highlighting the company’s commitment to operational reliability.
Freight and Asset Efficiency:
- Freight car velocity reached 226 daily miles per car, an 8% improvement over the same period in 2024. This metric underscores Union Pacific’s ability to move cargo more quickly across its network, enhancing service reliability for customers.
- Locomotive productivity rose to 140 gross ton-miles (GTMs) per horsepower day, a 4% increase compared with the prior year, demonstrating better utilization of key assets.
- Average terminal dwell decreased to 20.4 hours, improving 9% from the prior year, reflecting enhanced yard operations and faster turnaround of railcars.
- Average train length extended to 9,801 feet, a 2% increase, contributing to higher network efficiency and reduced operational costs.
- Workforce productivity, measured in car miles per employee, increased 6% to 1,165, reflecting process improvements and more effective labor deployment.
In addition to these record-setting operational metrics, Union Pacific achieved its best-ever quarterly results for freight revenue excluding fuel surcharges, terminal dwell, train length, workforce productivity, and fuel consumption rate, emphasizing its ongoing commitment to sustainable and efficient operations.
Strategic Outlook and Investor Alignment
Union Pacific remains focused on meeting customer demand with high-quality service while navigating ongoing challenges in international intermodal comparisons. The company continues to prioritize pricing strategies that contribute positively to its operating ratio, while maintaining earnings per share growth in line with its three-year compound annual growth rate (CAGR) target of high-single to low-double digits.
Key strategic priorities for 2025 include:
- Maintaining an industry-leading operating ratio and return on invested capital.
- Continuing strong cash generation to support strategic investments and shareholder returns.
- Executing a capital plan totaling $3.4 billion, which includes infrastructure investments, technology upgrades, and network enhancements.
Capital Allocation Highlights:
- In the third quarter of 2025, Union Pacific increased its quarterly dividend by 3%, reflecting the company’s commitment to returning value to shareholders.
- Share repurchases were temporarily paused to support the pending Norfolk Southern merger, ensuring financial flexibility and prudent capital management during this transformative transaction.
Merger Update: Building America’s First Transcontinental Railroad
Union Pacific is actively pursuing a merger with Norfolk Southern, a move that would create the nation’s first truly transcontinental railroad. The transaction remains subject to regulatory approval, and the company is engaging with stakeholders to ensure alignment and operational readiness. This strategic initiative is expected to unlock significant long-term value by expanding the network, improving service reliability, and generating operational synergies.
While awaiting regulatory clearance, Union Pacific’s management emphasizes disciplined operational execution and continued delivery of value to customers and shareholders. The ongoing merger-related efforts are reflected in the third quarter financials as a one-time $41 million expense.
Commitment to Operational and Financial Excellence
Union Pacific’s third quarter 2025 performance underscores its ability to deliver strong financial results while simultaneously achieving operational excellence. The company’s record-setting metrics in freight car velocity, locomotive productivity, terminal dwell, train length, workforce productivity, and fuel efficiency highlight its ongoing dedication to continuous improvement.
By focusing on safety, service, and operational performance, Union Pacific is positioning itself to sustain profitable growth and deliver long-term value for shareholders. The combination of strong revenue growth, disciplined cost management, and strategic initiatives such as the Norfolk Southern merger provides a compelling roadmap for the company’s future.
Non-GAAP Financial Measures:
Adjusted diluted earnings per share and adjusted operating ratio are considered non-GAAP financial measures. A reconciliation to GAAP financial measures is included in the supplemental schedule provided by the company. These adjusted measures exclude merger-related costs and are intended to provide additional insight into Union Pacific’s ongoing operational performance.
Union Pacific’s third quarter results reflect a balanced approach to growth, operational efficiency, and strategic investment. With strong revenue performance, record-setting operational metrics, and a clear path toward long-term shareholder value, the company continues to demonstrate leadership in the North American freight rail industry.
Looking ahead, Union Pacific remains committed to achieving its investor day targets, driving operational excellence, and leveraging strategic opportunities, including the potential creation of America’s first transcontinental railroad through the Norfolk Southern merger. The company’s disciplined execution, coupled with a focus on safety, service, and sustainable growth, positions Union Pacific for continued success in 2025 and beyond.
Union Pacific is a leading North American railroad company, operating an extensive freight network that connects key markets across the United States. The company is committed to providing safe, reliable, and efficient transportation solutions while delivering value to its customers, employees, and shareholders.