Union Pacific Corp (NYSE:UNP, ETR:UNP) reported mixed results for the third quarter, with revenue coming in below estimates but earnings outperforming on operating improvements and cost controls.
The railroad operator posted net income of $1.8 billion, or $3.01 per diluted share, compared with $1.7 billion, or $2.75 per share, a year earlier.
Adjusted diluted earnings per share were $3.08, above the analyst consensus of $2.99.
The company’s results included costs related to its proposed merger with Norfolk Southern of $41 million, or $0.07 per share.
For Q3, operating revenue rose 3% year-over-year to $6.24 billion, just shy of the roughly $6.25 billion expected by analysts.
The company said the increase reflected strong core pricing gains, partially offset by lower fuel surcharge revenue.
Freight revenue excluding fuel surcharge grew 4%, marking a record quarter for that metric, the company noted.
Union Pacific’s operating ratio, a key measure of efficiency improved 110 basis points to 59.2%. On an adjusted basis, the operating ratio was 58.5%, an improvement of 180 basis points.
“Our third quarter results serve as a proof point that we are successfully executing on our strategy,” Union Pacific CEO Jim Vena said in a statement.
“We have a historic opportunity with the Norfolk Southern to create America’s first transcontinental railroad. As we work towards regulatory approval, our team is focused and driving continued improvements in our pursuit of what's possible.”
The company also reaffirmed its full-year outlook, noting progress toward its Investor Day goals. It continues to target high-single to low-double digit compound annual growth in earnings per share over three years, along with an industry-leading operating ratio and strong cash generation.
Union Pacific maintained its 2025 capital plan of $3.4 billion and implemented a 3% dividend increase during the quarter. Share repurchases remain paused as the company advances its proposed merger with Norfolk Southern.
Shares of Union Pacific were unchanged at about $225 post-earnings.