Union Pacific Q4: Profit Up, Revenue Down Amid Volume Dip

Union Pacific Q4 net income rose 5% to $1.8B, but revenue and income declined due to lower freight volumes. Efficiency weakened, raising concerns for 2026 performance.

January 27, 2026 10:39 pm

🛑 Key Takeaways:

Union Pacific reported mixed Q4 2025 results, with net income rising 5% but operating revenue and income falling on lower freight volumes.
The Class I railroad narrowly missed analyst expectations, posting an adjusted EPS of $2.86 against a consensus estimate of $2.87.
A worsening Q4 operating ratio to 60.5% signals declining efficiency amid sustained macroeconomic pressures, a potential headwind for 2026 performance.

OMAHA, NE – Union Pacific (NYSE: UNP) today reported a 5% increase in fourth-quarter 2025 net income to $1.8 billion, or $3.11 per diluted share. However, the railroad missed analyst consensus estimates and revealed operational weakening, as a 4% drop in carloads pushed total operating revenue down 1% to $6.1 billion and operating income down 5% to $2.4 billion compared to Q4 2024.

Metric	Q4 2025 Result	Year-over-Year Change
Net Income	$1.8 Billion	▲ 5%
Operating Revenue	$6.1 Billion	▼ 1%
Operating Income	$2.4 Billion	▼ 5%
Revenue Carloads	Not specified	▼ 4%
Operating Ratio	60.5%	▲ 1.8 pts (Worsened)
Adjusted EPS (vs. Est.)	$2.86	▼ Missed $2.87 Estimate

Operational & Technical Details

The railroad’s mixed fourth-quarter performance was driven by conflicting factors. Core pricing gains and higher fuel surcharge revenue were not enough to overcome a 4% decline in total revenue carloads. This volume decrease was the primary cause for the 1% dip in operating revenue. Consequently, operating income fell 5%.

Efficiency metrics also deteriorated during the quarter. Union Pacific’s operating ratio (OR) — a key measure of operating expenses as a percentage of revenue — climbed to 60.5%. This marks a 180-basis-point increase from the 58.7% OR posted in Q4 2024, indicating higher costs relative to revenue.

For the full-year 2025, results were more positive. Annual operating revenue rose 1% to $24.5 billion, and net income grew 6% to $7.1 billion. The full-year operating ratio saw a slight improvement, tightening to 59.8% from 59.9% in 2024.

Market Impact Analysis

Union Pacific’s results reflect persistent challenges from “volatile freight demand and sustained macroeconomic pressures,” according to the company. The narrow miss on adjusted earnings per share underscores the difficult operating environment. The declining quarterly efficiency and freight volumes have raised concerns among analysts about the railroad’s trajectory heading into 2026.

JPMorgan analyst Brian Ossenbeck noted that Union Pacific may underperform in the coming year. He cited weak volume expectations and rising inflation as factors that could limit the company’s ability to improve margins through pricing power. The Q4 report provides tangible data supporting this cautious outlook for the North American rail sector.