11:15 AM EST, 01/23/2025 (MT Newswires) -- Union Pacific's ( UNP ) fourth-quarter earnings growth surpassed views while flat freight revenue contributed to a top-line miss as the railroad operator said it remains on track to meet targets outlined in September.

Revenue dipped to $6.12 billion for the three months ended Dec. 31 from $6.16 billion the year earlier, missing the $6.15 billion average analyst estimate on FactSet. Freight revenue, the company's largest top-line contributor, was virtually flat at $5.79 billion.

Earnings per share rose to $2.91 from $2.71 year over year and beat the Street's $2.79 estimate. Shares of Union Pacific ( UNP ) increased 4.5% in Thursday trade.

For 2025, the company said its on track to meet the guidance presented at its September investor day, including EPS growth that's consistent with attaining a three-year compound annual growth rate in the high-single to low-double-digit range.

Volumes this year are expected to be impacted by a "mixed economic backdrop, coal demand, and challenging year-over-year international intermodal comparisons," it wrote.

"We are keeping a watchful eye on potential tariff changes that could further impact volumes," Kenny Rocker, Union Pacific's ( UNP ) executive vice president of marketing and sales, told analysts on a conference call, according to a FactSet transcript.

In the fourth quarter, revenue was dented by lower fuel surcharge and unfavorable business mix, partially offset by stronger volumes and pricing, the company said. Business volume, as measured by total revenue carloads, increased 5% from the same period of 2023. Fuel surcharge revenue fell $207 million amid softer year-over-year fuel prices, Chief Financial Officer Jennifer Hamann told analysts.

"Coal continued to experience the same challenges seen throughout the year as demand remained soft due to high inventory levels and the competition from low natural gas prices," Rocker said.

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