Union Pacific Corp. (NYSE:UNP) reported its fourth-quarter and full-year 2025 financial results, delivering a mixed performance that fell short of Wall Street's top-line expectations. While the railroad operator posted record annual net income and touted significant operational improvements, a revenue miss and a weaker-than-anticipated operating ratio for the quarter appear to be weighing on investor sentiment in early trading.
Earnings and Revenue Versus Estimates
The company's financial results for the final quarter of 2025 presented a nuanced picture when measured against analyst forecasts. Union Pacific reported adjusted earnings per share (EPS) of $2.86, which came in slightly below the consensus estimate of $2.90. The more significant deviation was in revenue, where the company posted $6.085 billion against an expected $6.180 billion.
Key financial comparisons for Q4 2025:
- Reported Adjusted EPS: $2.86
- Analyst EPS Estimate: $2.90
- Reported Revenue: $6.085 billion
- Analyst Revenue Estimate: $6.180 billion
This revenue shortfall of approximately 1.5% was primarily driven by a 4% decline in revenue carloads, which core pricing gains and fuel surcharge revenue could not fully offset. For the full year, the company reported adjusted EPS of $11.66, a 5% improvement over 2024, on operating revenue of $24.5 billion, which was up 1%.
Market Reaction and Price Action
The market's initial reaction to the earnings release has been negative. In pre-market trading, shares of Union Pacific are down approximately 2.4%. This immediate price action suggests investors are focusing on the quarterly revenue miss and the deterioration in the operating ratio—a key efficiency metric—which worsened by 190 basis points to 60.0% on an adjusted basis for the quarter. This decline in operating efficiency, even amid record operational performance in areas like freight car velocity, appears to have overshadowed the positive full-year achievements.
Summary of Key Press Release Elements
Beyond the headline financials, Union Pacific's earnings release emphasized several record-breaking operational achievements for both the quarter and the full year. CEO Jim Vena stated the company delivered "best-ever safety, service, and operating results in 2025."
Notable operational highlights include:
- Safety: Reportable personal injury and derailment rates improved, with the personal injury rate described as industry-leading.
- Efficiency: The company set quarterly records for freight car velocity and terminal dwell, and full-year records for locomotive productivity, train length, and workforce productivity.
- 2026 Outlook: Management provided guidance aligned with its previous investor day targets, anticipating mid-single-digit EPS growth for 2026. This is consistent with a goal of achieving a high-single to low-double-digit compound annual growth rate through 2027. The outlook assumes a "muted economic forecast" but expects pricing to outpace inflation.
Forward-Looking Estimates and Outlook
The company's provided outlook for "mid-single digit" EPS growth in 2026 can be compared to existing analyst projections. Currently, the consensus sales estimate for full-year 2026 stands at $25.62 billion, with an EPS estimate of $12.60. Union Pacific's guidance suggests its internal forecast is broadly in line with or potentially cautious relative to these external expectations, given the stated muted economic backdrop.
For the upcoming first quarter of 2026, analysts are currently estimating revenue of $6.18 billion and EPS of $2.87.
For a detailed breakdown of Union Pacific's historical earnings, future estimates, and analyst projections, you can view more information here.
Disclaimer: This article is for informational purposes only and does not constitute financial advice, a recommendation, or an offer to buy or sell any securities. Investors should conduct their own research and consult with a qualified financial advisor before making any investment decisions.
