Union Pacific Corporation ( UNP ) reported strong third-quarter 2025 financial results, driven by operational efficiency gains and core pricing.

The rail transportation company announced net income of $1.8 billion, or $3.01 per diluted share. Including the effect of merger costs of $41 million, adjusted diluted EPS was $3.08, which beat the analyst estimate of $2.99.

The company’s operating revenue increased 3% to $6.244 billion, which narrowly missed the analyst estimate of $6.245 billion.

Related: A Look Ahead: Union Pacific’s Earnings Forecast

The reported operating ratio (OR) was 59.2%, an improvement of 110 basis points, and the adjusted OR was 58.5%, an improvement of 180 basis points, underscoring the company’s focus on cost control.

Operational Excellence and Efficiency

The company achieved significant operational improvements, setting third-quarter and “best-ever” records. Freight car velocity improved 8% to 226 daily miles per car.

Average terminal dwell improved 9% to 20.4 hours, and workforce productivity improved 6% to 1,165 car miles per employee. Locomotive productivity increased 4% to 140 gross ton-miles (GTMs) per horsepower day, and average train length increased 2% to 9,801 feet.

Safety also improved, with the reportable personal injury rate and reportable derailment rate both showing improvement.

Revenue Breakdown and Segment Performance

Freight revenue excluding fuel surcharge grew 4%. The Bulk segment saw revenue grow 7%, lifted by a 16% rise in Coal & renewables revenue and 6% in Grain & grain products.

Industrial segment revenue increased 3%. In the Premium segment, revenue decreased 2%, driven by a 3% decline in Intermodal revenue.

Outlook and Strategic Merger

CEO Jim Vena emphasized the focus on the pending Norfolk Southern Corporation ( NSC ) merger to create “America’s first transcontinental railroad.”

The company reaffirmed its 2025 outlook for EPS growth, consistent with attaining the 3-year CAGR target of high single to low double digits. The capital plan is $3.4 billion.

The 3% dividend increase for the quarter proceeded, but share repurchases were paused due to the merger. The outlook acknowledges risks related to the merger, as well as general tariffs and macroeconomic factors.

Price Action: UNP shares were trading lower by 1.44% to $222.00 at last check Thursday.

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