3rd quarter 2026
Filed Oct 22, 2026Record third-quarter financial results: operating revenue rose 15%, diluted EPS rose 16%, and revenue carloads grew 6%.
Third-quarter operating revenue, operating income, net income and diluted EPS each increased by double digits, supported by 6% revenue-carload growth, pricing gains and higher fuel surcharge. Reported operating ratio improved to 59.1%, although adjusted operating ratio increased to 58.8% and high fuel prices unfavorably impacted operating ratio by 140 basis points.
Key metrics
shortened, hover for the filing’s print| Metric | Value | q/q | y/y |
|---|---|---|---|
| 3rd quarter operating revenuesGAAP | $7.20B | – | 15 % |
| 3rd quarter freight revenuesGAAP | $6.81B | – | 15 % |
| 3rd quarter other revenuesGAAP | $384M | – | 21 % |
| 3rd quarter compensation and benefitsGAAP | $1.26B | – | 4 % |
| 3rd quarter fuel expenseGAAP | $1.04B | – | 69 % |
| 3rd quarter purchased services and materialsGAAP | $746M | – | 9 % |
| 3rd quarter depreciationGAAP | $643M | – | 4 % |
| 3rd quarter equipment and other rentsGAAP | $206M | – | (3) % |
| 3rd quarter other operating expensesGAAP | $355M | – | 1 % |
| 3rd quarter total operating expensesGAAP | $4.25B | – | 15 % |
| 3rd quarter operating incomeGAAP | $2.94B | – | 15 % |
| 3rd quarter other income, netGAAP | $95M | – | (1) % |
| 3rd quarter interest expenseGAAP | −$312M | – | (5) % |
| 3rd quarter income before income taxesGAAP | $2.73B | – | 18 % |
| 3rd quarter income tax expenseGAAP | −$650M | – | 23 % |
| 3rd quarter net incomeGAAP | $2.08B | – | 16 % |
| 3rd quarter earnings per share - basicGAAP | $ 3.50 | – | 16 % |
| 3rd quarter earnings per share - dilutedGAAP | $ 3.49 | – | 16 % |
| 3rd quarter dividends declared per shareGAAP | $ 1.42 | – | 3 % |
| 3rd quarter operating ratioGAAP | 59.1 % | – | (0.1) pts |
| 3rd quarter effective tax rateGAAP | 23.8 % | – | 0.9 pts |
| 3rd quarter adjusted operating expensesnon-GAAP | $4.23B | – | – |
| 3rd quarter adjusted operating incomenon-GAAP | $2.96B | – | – |
| 3rd quarter adjusted net incomenon-GAAP | $2.10B | – | 15% |
| 3rd quarter adjusted diluted earnings per sharenon-GAAP | $ 3.53 | – | 15% |
| 3rd quarter adjusted operating rationon-GAAP | 58.8 % | – | increased 30 basis points |
| Year-to-date operating revenuesGAAP | $20.28B | – | 10 % |
| Year-to-date operating incomeGAAP | $8.16B | – | 10 % |
| Year-to-date net incomeGAAP | $5.77B | – | 9 % |
| Year-to-date earnings per share - dilutedGAAP | $ 9.71 | – | 9 % |
| Year-to-date operating ratioGAAP | 59.7 % | – | 0.1 pts |
| Year-to-date cash provided by operating activitiesGAAP | $8.30B | – | – |
| Year-to-date capital investmentsGAAP | −$2.83B | – | – |
| Year-to-date free cash flownon-GAAP | $2.36B | – | – |
| Cash and cash equivalents at September 30, 2026GAAP | $2.21B | – | – |
| Short-term investments at September 30, 2026GAAP | $875M | – | – |
| Debt due within one year at September 30, 2026GAAP | $1.29B | – | – |
| Debt due after one year at September 30, 2026GAAP | $29.04B | – | – |
| 3rd quarter revenue carloadsother | 2.29M | – | 6 % |
| 3rd quarter average revenue per carother | $ 2,971 | – | 8 % |
| 3rd quarter freight car velocityother | 228 daily miles per car | – | 1 % |
| 3rd quarter average terminal dwell timeother | 19.9 hours | – | (2) |
| 3rd quarter gross ton-milesother | 232.5B | – | 4 |
| 3rd quarter workforce productivityother | 1,219 car miles per employee | – | 5 |
| 3rd quarter average fuel price per gallon consumedother | $ 4.21 | – | 64 % |
| 3rd quarter fuel consumption rateother | 1.034 | – | (2) |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| Grain & grain productsRevenue carloads were 225 thousand and average revenue per car was $ 4,837. | $1.08B | – | 11 % |
| FertilizerRevenue carloads were 55 thousand and average revenue per car was $ 4,256. | $234M | – | 3 |
| Food & refrigeratedRevenue carloads were 40 thousand and average revenue per car was $ 6,678. | $272M | – | 5 |
| Coal & renewablesRevenue carloads were 209 thousand and average revenue per car was $ 2,516. | $525M | – | 12 |
| BulkRevenue carloads were 529 thousand and average revenue per car was $ 4,004. | $2.12B | – | 10 |
| Industrial chemicals & plasticsRevenue carloads were 185 thousand and average revenue per car was $ 3,789. | $701M | – | 8 |
| Metals & mineralsRevenue carloads were 209 thousand and average revenue per car was $ 3,185. | $666M | – | 17 |
| Forest productsRevenue carloads were 54 thousand and average revenue per car was $ 6,911. | $371M | – | 13 |
| Energy & specialized marketsRevenue carloads were 158 thousand and average revenue per car was $ 4,857. | $771M | – | 18 |
| IndustrialRevenue carloads were 606 thousand and average revenue per car was $ 4,136. | $2.51B | – | 14 |
| AutomotiveRevenue carloads were 202 thousand and average revenue per car was $ 3,324. | $671M | – | 11 |
| IntermodalRevenue carloads were 956 thousand and average revenue per car was $ 1,586. | $1.52B | – | 27 |
| PremiumRevenue carloads were 1,158 thousand and average revenue per car was $ 1,889. | $2.19B | – | 21 |
2026 Outlook outlook
- NoteReported earnings per share growth of high-single digit; consistent with attaining 3-year CAGR target of high-single to low-double digit through 2027.
- NotePricing dollars in excess of inflation dollars.
- NoteIndustry-leading operating ratio and return on invested capital.
- NoteContinued strong cash generation and consistent annual dividend increases.
- NoteOperating ratio improvement from core business; reported operating ratio challenged by high fuel prices.
- NoteCapital plan of $3.5 billion.
Capital returns
- Dividends paid were $ (2,484) million for the year-to-date period ended September 30, 2026, compared to $ (2,418) million in 2025.
- Share repurchase programs were $ (26) million for the year-to-date period ended September 30, 2026, compared to $ (2,679) million in 2025.
- Dividends declared per share were $ 1.42 in the 3rd quarter and $ 4.18 year-to-date.
What drove it
- Operating revenue growth was driven by higher fuel surcharge, 6% volume growth, core pricing gains and increased other revenue, partially offset by business mix.
- Freight revenue excluding fuel surcharge increased 6%.
- Intermodal freight revenue increased 27%, the largest percentage increase among reported freight-revenue categories.
- Premium freight revenue increased 21%, while Industrial freight revenue increased 14% and Bulk freight revenue increased 10%.
- Fuel expense increased 69%, while the average fuel price per gallon consumed increased 64%.
- Higher fuel price unfavorably impacted operating ratio 140 basis points.
- Freight car velocity was 228 daily miles per car, average terminal dwell was 19.9 hours, and workforce productivity was 1,219 car miles per employee.
Concerns
- Adjusted operating ratio increased 30 basis points to 58.8%, despite reported operating ratio improving 10 basis points to 59.1%.
- Intermodal service performance index was 92, down 6 pts, and manifest service performance index was 93, down 7 pts.
- Fuel expense was $ 1,040 million, up 69%, and the company said reported operating ratio is challenged by high fuel prices.
- The company cited a mixed economic forecast.
- The proposed transaction remains subject to Surface Transportation Board merger review and other conditions described in the filing.
What to watch
- Reported earnings per share growth of high-single digit in the 2026 outlook.
- Pricing dollars in excess of inflation dollars.
- Operating-ratio improvement from the core business versus the impact of high fuel prices.
- Execution in meeting increased customer demand with strong service.
- Capital plan of $3.5 billion.
- Surface Transportation Board merger review process.
Balance sheet and cash flow
- Cash and cash equivalents were $ 2,211 million at Sep. 30, 2026, compared with $ 1,266 million at Dec. 31, 2025.
- Short-term investments were $ 875 million at Sep. 30, 2026, compared with $ 250 million at Dec. 31, 2025.
- Total debt was $ 30,324 million at Sep. 30, 2026, compared with $ 31,814 million at Dec. 31, 2025.
- Cash provided by operating activities was $ 8,302 million year-to-date, compared with $ 7,065 million.
- Cash used in investing activities was $ (3,456) million year-to-date, compared with $ (2,791) million.
- Net change in cash, cash equivalents, and restricted cash was 938 million year-to-date, compared with (198) million.
- Debt / net income was 4.0 at Sep. 30, 2026, compared with 4.5 at Dec. 31, 2025.
- Adjusted debt / adjusted EBITDA was 2.4 at Sep. 30, 2026, compared with 2.7 at Dec. 31, 2025.
Analysis
Union Pacific reported record third-quarter operating revenue of $ 7,197 million, up 15 %, and record operating income of $ 2,943 million, up 15 %. Net income increased 16 % to $ 2,076 million and diluted EPS increased 16 % to $ 3.49. Adjusted diluted EPS was $ 3.53, up 15%. The result was supported by 6 % revenue-carload growth, core pricing gains, higher fuel surcharge and increased other revenue, partially offset by business mix.
Freight revenue increased 15 % to $ 6,813 million. Premium revenue increased 21 % to $ 2,188 million, including a 27 % increase in intermodal revenue to $ 1,517 million. Industrial revenue increased 14 % to $ 2,509 million and Bulk revenue increased 10 % to $ 2,116 million. Average revenue per car increased 8 % to $ 2,971, while total revenue carloads rose 6 % to 2,293 thousand.
Reported operating ratio improved 10 basis points to 59.1 %, but adjusted operating ratio increased 30 basis points to 58.8 %. Fuel expense rose 69 % to $ 1,040 million as average fuel price per gallon consumed increased 64 % to $ 4.21, and management said higher fuel price unfavorably impacted operating ratio 140 basis points. Operational measures showed freight car velocity increased 1 % to 228 daily miles per car, terminal dwell improved 2 % to 19.9 hours, and workforce productivity increased 5 % to 1,219 car miles per employee. Service-performance indexes declined to 92 for intermodal and 93 for manifest.
Year-to-date operating cash flow increased to $ 8,302 million from $ 7,065 million and free cash flow increased to $ 2,362 million from $ 1,856 million. Dividends paid were $ (2,484) million, while share repurchases were $ (26) million, compared with $ (2,679) million in the prior-year period. The company affirmed its outlook for high-single-digit reported EPS growth, pricing dollars in excess of inflation dollars, continued cash generation and annual dividend increases. It updated its operating-ratio outlook to emphasize core-business improvement while identifying high fuel prices as a challenge, and retained a capital plan of $3.5 billion.
Management, verbatim
Union Pacific's third quarter results demonstrate our ability to safely deliver the service we sold to our customers while efficiently handling six percent volume growth.
Jim Vena, Union Pacific Chief Executive Officer
We executed at a consistently high level, enabling record financial results and further reinforcing our position as the industry leader.
Jim Vena, Union Pacific Chief Executive Officer
Not in the filing
stated, not guessed- Gross margin was not reported.
- Quarterly operating cash flow was not reported.
- Quarterly free cash flow was not reported.
- A numerical revenue outlook was not reported.
- A numerical operating-income outlook was not reported.
- A numerical operating-ratio outlook was not reported.
- Prior-period outlook was not provided, so comparison of actual results with prior guidance is unavailable.
- A named CFO commentary section was not provided.
Written by an AI language model from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure is checked against the filing text, and a metric the filing does not print, or whose value, prior period and change do not add up, is dropped from the metrics. The model can still misread a table, in the metrics or in the text, so check a number in the filing before you rely on it. Consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.