01—Abstract
Summary
Summary of the 10-K filed February 6, 2026. Cited figures are marked; the original filing is the authoritative source.
Union Pacific Corporation (UNP) reported fiscal year 2025 results demonstrating resilience and strategic execution, despite ongoing macroeconomic uncertainties.
The company achieved a 1% increase in freight revenue to $23.2 billiona, driven by core pricing gains and a 1% volume growth, although this was partially offset by shifts in traffic mix and lower fuel surcharge revenues. Safety remains a paramount focus, with significant year-over-year improvements in both personal injury rates (down 24%) and derailment incident rates (down 19%), attributed to enhanced training, technology leverage, and employee engagement. Service metrics also saw strong performance, with freight car velocity increasing by 8% and terminal dwell time decreasing by 8%.
Operationally, the company adapted to changing demand, maintaining network fluidity. Financially, operating income grew 1% to $9.8 billionb, and the operating ratio improved to 59.8%. Net income rose 8% to $7.1 billion, or $11.98 per diluted share.
The company generated substantial operating cash flow of $9.3 billionc and free cash flow of $2.3 billion. A significant development is the pending acquisition of Norfolk Southern, announced in July 2025. While the merger application was recently deemed incomplete by the STB, prompting a resubmission, the strategic rationale aims to create a dominant transcontinental railroad.
This merger, however, introduces integration risks and regulatory hurdles that investors will monitor closely. The company also paused its share repurchase program due to the acquisition.
Looking ahead to 2026, Union Pacific anticipates continued macroeconomic uncertainty impacting volumes, particularly in international intermodal, while expecting strength in coal. The company remains committed to its core strategies of Safety, Service, and Operational Excellence.
02—Key points
Key Highlights
- Freight revenues grew 2% to $23.2 billion in 2025, driven by pricing gains and a 1% increase in volume.
- Significant safety improvements were reported, with a 24% decrease in personal injury rate and a 19% decrease in derailment incident rate compared to 2024.
- Service metrics improved, with freight car velocity up 8% and terminal dwell time down 8%, leading to record operating metrics.
- Operating income increased 1% to $9.8 billion, and the operating ratio improved 0.1 percentage points to 59.8%.
- Net income rose 8% to $7.1 billion, or $11.98 per diluted share.
- The company generated $9.3 billion in cash from operations and $2.3 billion in free cash flow.
- Union Pacific announced a pending acquisition of Norfolk Southern in July 2025, a deal facing regulatory review.
- The 2026 capital plan is projected at $3.3 billion, focusing on safety, infrastructure, and growth projects.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-KFY2025filed February 6, 2026Financial Statements
FY2025 against FY2024
| Line item | FY2025FY2024 | Change |
|---|---|---|
| Revenue | $24.51B$24.25B | +1.1% |
| Operating Expenses | $14.66B$14.54B | +0.9% |
| Operating Income | $9.85B$9.71B | +1.4% |
| Net Income | $7.14B$6.75B | +5.8% |
| EPS (Basic) | $12.00$11.10 | +8.1% |
| EPS (Diluted) | $11.98$11.09 | +8.0% |
| Shares Outstanding (Basic) | 595.00M607.60M | −2.1% |
| Shares Outstanding (Diluted) | 595.90M608.60M | −2.1% |
05—Questions
Frequently Asked Questions
What was Union Pacific's financial performance in 2025?
In 2025, Union Pacific reported freight revenues of $23.2 billion, a 2% increase year-over-year, driven by core pricing gains and a 1% volume increase. Operating income was $9.8 billion, up 1%, and net income reached $7.1 billion, an 8% increase, resulting in diluted earnings per share of $11.98. The operating ratio improved slightly to 59.8%. The company also generated robust operating cash flow of $9.3 billion and $2.3 billion in free cash flow.
What are the key operational highlights for Union Pacific in 2025?
Union Pacific achieved significant improvements in safety, with a 24% reduction in its personal injury rate and a 19% reduction in its derailment incident rate compared to 2024. Service metrics also showed strong performance, with freight car velocity increasing by 8% and terminal dwell time decreasing by 8%, leading to some of the best operational metrics in the company's history.
What is the status of the Norfolk Southern acquisition?
Union Pacific announced its agreement to acquire Norfolk Southern in July 2025. While shareholder approvals have been obtained, the Surface Transportation Board (STB) recently issued a decision deeming the joint application for approval incomplete, requiring a revised application to be filed. The company expects the transaction, if completed, to be accounted for as a business combination and is currently projected to close in 2027. This acquisition is a significant strategic move but introduces integration and regulatory risks.
What is Union Pacific's outlook for 2026?
For 2026, Union Pacific anticipates continued macroeconomic uncertainty that may impact overall volumes, particularly in international intermodal. However, it expects higher coal demand due to elevated natural gas prices and increased coal-fired electricity production. The company plans to invest approximately $3.3 billion in its capital program, focusing on enhancing safety, network resilience, operational efficiency, and supporting growth initiatives.
06—Continue