Union Pacific Q2 Earnings & Revenues Surpass Estimates, Rise Y/Y

Union Pacific Corporation’s UNP second-quarter 2025 earnings (excluding 12 cents from non-recurring items) of $3.03 per share beat the Zacks Consensus Estimate of $2.91. The bottom line improved 10.6% on a year-over-year basis. This year-over-year improvement was due to strong operational efficiency.

Operating revenues of $6.2 billion marginally beat the Zacks Consensus Estimate of $6.1 billion. The top line improved 2.5% on a year-over-year basis, owing to higher volumes and solid core pricing gains.

Union Pacific Corporation Price, Consensus and EPS Surprise

 

Union Pacific Corporation price-consensus-eps-surprise-chart | Union Pacific Corporation Quote

Freight revenues, accounting for 95% of the top line, improved 4% to $5.8 billion. The actual figure surpassed our estimate of $5.67 billion. Other revenues decreased 16% to $311 million in the second quarter of 2025. Business volumes, measured by total revenue carloads, increased 4% year over year. The operating income was up 5% year over year at $2.5 billion.

Total operating expenses of $3.6 billion inched up 1% year over year. Fuel expenses decreased 8%. Expenses on purchased services and materials were flat, expenses on compensation and benefits increased 5% and other cost items declined 5% year over year.

The operating ratio (operating expenses as a percentage of revenues) in the second quarter of 2025, on an adjusted basis, improved 230 basis points year over year to 58.1%.

UNP’s Segmental Highlights

Bulk (Grain & grain products, Fertilizer, Food & refrigerated, Coal & renewables) freight revenues were $1.9 billion, which increased 10% on a year-over-year basis. We projected the metric to increase 3.1% from the year-ago levels. Segmental revenue carloads increased 11% year over year.

Industrial freight revenues totaled $2.2 billion, up 4% year over year. We projected the metric to increase 3% from the year-ago levels. Segmental revenue carloads increased 3% to $569 million year over year.

Freight revenues in the Premium division were $1.73 billion, down 4% year over year. We expected the metric to decrease 4.9% compared with the year-ago reported figure. Premium revenue carloads improved 1% year over year.

UNP’s Liquidity

Union Pacific exited the second quarter of 2025 with cash and cash equivalents of $1.06 billion compared with $1 billion at 2024 end. Debt (due after a year) increased to $30.3 billion in the June-end quarter from $29.6 billion at 2024’s end.

Currently, Union Pacific carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

UNP-NSC Merger Update

Union Pacific confirmed that it is engaged in advanced discussions with fellow railroad operator Norfolk Southern NSC regarding a potential business combination. No further details were given.

Earlier this year, Union Pacific, chief executive officer, Jim Vena, hinted at the possible profits that are likely to result from such a merger. This includes the enhancement of transfer-based bottlenecks in places like Chicago, where West Coast and East Coast operators often offload cargo to be transferred to another operator’s network.

Q2 Performance of Other Transportation Companies

Delta Air Lines DAL reported second-quarter 2025 earnings (excluding $1.17 from non-recurring items) of $2.10 per share, which beat the Zacks Consensus Estimate of $2.04. Earnings decreased 11% on a year-over-year basis due to high labor costs.

Revenues in the June-end quarter were $16.65 billion, which beat the Zacks Consensus Estimate of $16.2 billion and decreased marginally on a year-over-year basis. Adjusted operating revenues (excluding third-party refinery sales) increased 1% year over year to $15.5 billion.

United Airlines’ UAL second-quarter 2025 adjusted EPS (excluding 90 cents from non-recurring items) of $3.87 beat the Zacks Consensus Estimate by a penny but declined 6.5% on a year-over-year basis. The reported figure lies within the guided range of $3.25-$4.25 per share.

Operating revenues of $15.2 billion missed the Zacks Consensus Estimate of $15.4 billion but increased 1.7% year over year. Passenger revenues (which accounted for 90.8% of the top line) increased 1.1% year over year to $13.8 billion. UAL flights transported 46,186 passengers in the second quarter, up 4.1% year over year.

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This article originally published on Zacks Investment Research (zacks.com).

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