Union Pacific Reports Q2 2025 Earnings: Revenue Up 2.4%, EPS Surpasses Expectations

Union Pacific's Q2 2025 earnings show revenue of $6.15 billion, up 2.4% YoY, and net income of $1.88 billion, up 12% YoY. Profit margin increased to 31% from 28% in Q2 2024, driven by higher revenue. EPS was $3.16, up from $2.75 in Q2 2024, beating analyst estimates by 8.4%. Revenue is forecast to grow 4.1% p.a. over the next 3 years, compared to a 7.3% growth forecast for the Transportation industry in the US.

Union Pacific Corporation (UNP) reported its second-quarter 2025 earnings, showcasing robust financial performance and a positive outlook for the future. The company's earnings per share (EPS) of $3.03, excluding non-recurring items, exceeded the Zacks Consensus Estimate of $2.91, marking a 10.6% year-over-year (YoY) improvement. This growth was primarily driven by strong operational efficiency.

Revenue for the quarter amounted to $6.2 billion, a marginal beat of the Zacks Consensus Estimate of $6.1 billion, with a 2.5% YoY increase. The top line improvement was attributed to higher volumes and solid core pricing gains. Freight revenues, which account for 95% of the top line, improved by 4% to $5.8 billion, surpassing the estimated $5.67 billion. Other revenues decreased by 16% to $311 million.

Operating income for the period was up 5% YoY at $2.5 billion, while total operating expenses of $3.6 billion inched up 1% YoY. Fuel expenses decreased by 8%, and expenses on compensation and benefits increased by 5%. The operating ratio (operating expenses as a percentage of revenues) improved by 230 basis points to 58.1% on an adjusted basis.

Segmental highlights revealed that bulk freight revenues increased by 10% YoY to $1.9 billion, while industrial freight revenues totaled $2.2 billion, up 4% YoY. Freight revenues in the Premium division decreased by 4% YoY to $1.73 billion. Business volumes, measured by total revenue carloads, increased by 4% YoY.

Union Pacific exited the second quarter of 2025 with cash and cash equivalents of $1.06 billion compared to $1 billion at the end of 2024. Debt (due after a year) increased to $30.3 billion from $29.6 billion. Currently, the company carries a Zacks Rank #3 (Hold).

The company's strong performance is expected to continue, with analysts forecasting revenue growth of 4.1% per annum over the next three years, compared to a 7.3% growth forecast for the Transportation industry in the US. Union Pacific's ability to maintain growth despite operational challenges and potential mergers underscores its resilience and strategic positioning.

For more detailed information, refer to the following sources:
[1] https://finance.yahoo.com/news/union-pacific-q2-earnings-revenues-164000876.html
[2] https://www.investing.com/news/swot-analysis/union-pacifics-swot-analysis-railroad-stock-faces-growth-challenges-merger-talks-93CH-4156375