A month has gone by since the last earnings report for Union Pacific (UNP). Shares have added about 16.1% in that time frame, outperforming the S&P 500.
But investors have to be wondering, will the recent positive trend continue leading up to its next earnings release, or is Union Pacific due for a pullback? Well, first let's take a quick look at its latest earnings report in order to get a better handle on the recent catalysts for Union Pacific Corporation before we dive into how investors and analysts have reacted as of late.
Earnings Miss at Union Pacific in Q4
Quarterly earnings (excluding 25 cents from non-recurring items) of $2.86 per share missed the Zacks Consensus Estimate of $2.90 and decreased 1.7% on a year-over-year basis.
Operating revenues of $6.08 billion missed the Zacks Consensus Estimate of $6.14 billion and fell 1% on a year-over-year basis, owing to lower volume, partially offset by core pricing gains and fuel surcharge revenue. Revenue carloads declined 4% year over year.
Freight revenues (accounting for 94.5% of the top line) fell 1% year over year to $5.75 billion. Other revenues decreased 2% year over year to $326 million in the fourth quarter of 2025.
The operating income was down 5% year over year at $2.40 billion. Total operating expenses of $3.68 billion inched up 2% year over year. Fuel expenses increased 2% year over year. Expenses on purchased services and materials increased 8% on a year-over-year basis, while expenses on compensation and benefits decreased 3% year over year.
The operating ratio (operating expenses as a percentage of revenues) in the fourth quarter of 2025, on an adjusted basis, declined 190 basis points year over year to 60%.
Bulk (Grain & grain products, Fertilizer, Food & refrigerated, Coal & renewables) freight revenues were $1.91 billion, which increased 3% on a year-over-year basis. Segmental revenue carloads increased 3% year over year.
Industrial freight revenues came in at $2.11 billion, up 1% year over year. Segmental revenue carloads increased 1% to $561 million year over year.
Freight revenues in the Premium division were $1.72 billion, down 6% year over year. Premium revenue carloads decreased 10% year over year.
Union Pacific exited the fourth quarter of 2025 with cash and cash equivalents of $1.26 billion compared with $808 billion at the prior-quarter end. Debt (due after a year) of $30.29 billion was flat sequentially.
For 2026, earnings per share are expected to register growth of mid-single digit, consistent with attaining the three-year CAGR target of high-single digit to low-double digit through 2027.
UNP further anticipates operating ratio improvement. Capital expenditure is expected to be approximately $3.3 billion. UNP aims to continue generating strong cash while increasing annual dividend payouts.
How Have Estimates Been Moving Since Then?
Since the earnings release, investors have witnessed a downward trend in fresh estimates.
VGM Scores
Currently, Union Pacific has a subpar Growth Score of D, a score with the same score on the momentum front. Following the exact same course, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for value investors.
Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Interestingly, Union Pacific has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Union Pacific belongs to the Zacks Transportation - Rail industry. Another stock from the same industry, CSX (CSX), has gained 13% over the past month. More than a month has passed since the company reported results for the quarter ended December 2025.
CSX reported revenues of $3.51 billion in the last reported quarter, representing a year-over-year change of -0.9%. EPS of $0.39 for the same period compares with $0.42 a year ago.
CSX is expected to post earnings of $0.40 per share for the current quarter, representing a year-over-year change of +17.7%. Over the last 30 days, the Zacks Consensus Estimate has changed -0.9%.
CSX has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of F.
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Union Pacific Corporation (UNP): Free Stock Analysis Report CSX Corporation (CSX): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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