Union Pacific Corp. (NYSE:UNP) on Thursday reported better-than-expected second-quarter 2025 earnings and revenue, driven by volume growth, core pricing gains, and record operational productivity.
The railroad posted net income of $1.9 billion, or $3.15 per diluted share, up from $1.7 billion, or $2.74 per share, in the year-ago quarter.
Adjusted earnings per share came in at $3.03, excluding a $115 million deferred tax benefit and a $55 million crew staffing charge, topping the consensus estimate of $2.86 per share.
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Revenue rose 2% year-over-year to $6.15 billion, surpassing the $6.10 billion estimate, as volume increased 4%, carloads revenue rose 4%, and freight revenue excluding fuel surcharges grew 6%.
Operating income climbed 5% to $2.53 billion, and the reported operating ratio improved by 100 basis points to 59.0%. On an adjusted basis, the operating ratio stood at 58.1%, a 230-basis-point improvement from a year ago.
Union Pacific also reported improved efficiency metrics across its network. Freight car velocity rose 10%, locomotive productivity increased 5%, and workforce productivity jumped 9% to 1,124 car miles per employee.
The average train length grew 2% to 9,689 feet. The company also noted improvements in injury and derailment rates.
“These results reflect the strong momentum we’ve built in delivering safe, reliable service,” CEO Jim Vena said in a statement. “The foundation is built, we are growing with our customers, and we have strong momentum as we continue to maximize the value of our great franchise.”
On July 16, the board approved a 3% increase in the quarterly dividend to $1.38 per share, payable Sept. 30, 2025, to shareholders of record as of Aug. 29.
Outlook
Union Pacific reaffirmed its full-year 2025 guidance, projecting earnings growth consistent with its long-term target of high-single to low-double-digit compound annual growth. The company maintained its $3.4 billion capital spending plan and $4.0 to $4.5 billion share repurchases.
Merger Talks
Separately, Union Pacific and Norfolk Southern (NYSE:NSC) confirmed they are in advanced discussions regarding a potential business combination. Both companies cautioned that there is no assurance a deal will be reached and said they do not plan to provide further updates unless required.
Union Pacific is valued at about $140 billion, while Norfolk Southern is worth roughly $60 billion. The merger would create the nation’s first coast-to-coast rail network, a move CEO Jim Vena says could improve service by reducing transfer delays.
Price Action: At last check Thursday, UNP shares were trading lower by 3.03% to $224.00.
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