Union Pacific's Q4 Revenue Misses Analyst Estimates Despite Record Profit

Union Pacific reported Q4 2022 revenue of $6.085bn, slightly below the prior year, but net income rose to $1.848bn and diluted EPS increased to $3.11. The earnings miss, despite higher net income, highlights the tension between long-term execution and short-term volume and margin pressures. The company's investment narrative emphasizes steady, capital-intensive rail operations, with incremental efficiency gains and disciplined pricing. However, the US Surface Transportation Board's rejection of the Norfolk Southern merger complicates near-term catalysts, introducing regulatory risk. Union Pacific shares are undervalued by 21%.