Key Takeaways:
- Union Pacific Q2 adjusted EPS of $3.41 beat the year-ago $3.03, up 13%
- Operating revenue rose 12% to $6.9 billion on volume growth and pricing gains
- The railroad raised its full-year outlook, targeting high-single-digit EPS growth
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Union Pacific beats with $3.41 adjusted EPS as rail volumes rise 2%
Union Pacific Corp. reported second-quarter net income of $2.0 billion, or $3.36 a share, up 7% from a year earlier, as freight revenue rose 12% to $6.5 billion on higher fuel surcharges, volume growth and core pricing gains.
"Strong execution and volume growth enabled another successful quarter and record financial results," Chief Executive Officer Jim Vena said.
Adjusted diluted earnings per share of $3.41 topped the $3.03 reported in the year-ago period, a 13% increase. Operating revenue reached $6.9 billion, up 12%, while operating income rose 9% to $2.8 billion. The reported operating ratio — operating expenses as a percentage of revenue — came in at 59.7%, up 70 basis points from a year earlier, with higher fuel prices adding 120 basis points of unfavorable impact.
Total carloads rose 2% to 2.2 million, with grain and grain products up 12%, automotive up 11% and metals and minerals up 3%. Intermodal revenue surged 26% to $1.4 billion, while premium revenue climbed 21% to $2.1 billion. Average revenue per car increased 8% to $3,014. The railroad posted record workforce productivity of 1,176 car miles per employee, up 5%, and freight car velocity improved 5% to 231 daily miles per car.
The Omaha, Nebraska-based railroad raised its full-year outlook, saying it now expects high-single-digit earnings per share growth, consistent with its three-year compound annual growth rate target of high-single to low-double digits through 2027. The company affirmed its pricing strategy of dollars in excess of inflation dollars and maintained its capital plan of $3.3 billion. Free cash flow for the first half of 2026 totaled $1.8 billion, up from $1.1 billion a year earlier.
The guidance raise signals management expects demand to continue strengthening across its bulk and industrial segments. Investors will watch the company's progress on its proposed merger with Norfolk Southern, which Vena said is ready to move forward in the regulatory process.
This article is for informational purposes only and does not constitute investment advice.
