Record Q3 performance with EPS up 12% and OR improvement.
Union Pacific delivered a strong Q3 2025 with record operational metrics and 12% adjusted EPS growth, but management flagged a 6% volume decline in Q4 driven by international intermodal weakness. The call focused heavily on the proposed Norfolk Southern merger, highlighting customer support, labor agreements, and expected synergies despite vocal opposition from competitor BN. The team expressed confidence in long-term targets while navigating a soft macro backdrop. Q3 adjusted EPS $3.08 (+12% YoY), adjusted OR 58.5% (180bps improvement).
Buzzberg readRecord Q3 performance with EPS up 12% and OR improvement.Union Pacific delivered a strong Q3 2025 with record operational metrics and 12% adjusted EPS growth, but management flagged a 6% volume decline in Q4 driven by international intermodal weakness. The call focused heavily on the proposed Norfolk Southern merger, highlighting customer support, labor agreements, and expected synergies despite vocal opposition from competitor BN. The team expressed confidence in long-term targets while navigating a soft macro backdrop. Q3 adjusted EPS $3.08 (+12% YoY), adjusted OR 58.5% (180bps improvement).Read full analysisCollapse analysis
Union Pacific delivered a strong Q3 2025 with record operational metrics and 12% adjusted EPS growth, but management flagged a 6% volume decline in Q4 driven by international intermodal weakness. The call focused heavily on the proposed Norfolk Southern merger, highlighting customer support, labor agreements, and expected synergies despite vocal opposition from competitor BN. The team expressed confidence in long-term targets while navigating a soft macro backdrop. Q3 adjusted EPS $3.08 (+12% YoY), adjusted OR 58.5% (180bps improvement).
Freight revenue ex-fuel set a record; volume flat but core pricing + mix up 3.5%.
Management reaffirms long-term growth targets despite near-term volume headwinds, signaling confidence in underlying execution but no upgrade to guidance.
Capex
Investment and capacity
Management did not provide specific capex guidance, but mentioned ongoing investments in the network, employees, technology, and communities to improve safety and efficiency.
Tone · Upbeat Confident
Management highlighted record operational and financial results, expressed strong confidence in the merger's benefits, and maintained a forward-looking positive stance despite near-term volume headwinds.
Supply-chain alpha
A1
Truck production is down about 28%, which could lead to a tightening of truck capacity and eventually support intermodal pricing and volume.
Union Pacific secured over 400 customer letters of support for the Norfolk Southern merger, indicating strong shipper endorsement that may reduce regulatory risk.
International intermodal volumes declined 17% year over year due to tough comps and softer West Coast imports, but domestic intermodal set record volumes.
International intermodal volumes declined 17% year over year due to tough comps and softer West Coast imports, but domestic intermodal set record volumes. — The divergence between international and domestic intermodal highlights shifting trade patterns and the importance of the domestic franchise.
“we have a historic opportunity ahead, the focus remains on today further optimizing the best real franchise in North America.”
Truck production is down about 28%, which could lead to a tightening of truck capacity and eventually support intermodal pricing and volume. — A structural reduction in truck supply could shift freight back to rail, benefiting intermodal networks across the industry.
“we have the Falcon out there with Canadian National that's working well”
Hey, good morning, guys, and thanks for fitting me in here. So, Kenny, a couple months ago, UP and Norfolk put out some marketing material around enhanced collaboration in the network. I was wondering if you could maybe talk a little bit about how those changes are being made and how that level of integration would compare to maybe a post-merger world. And then if you have any comments on kind of what you're thinking about doing with the UMAX program longer term, we'd love to hear kind of some more perspective from you on that.
Thanks. Yeah, so let me just first off and say, you know, we have alliances that we're working with with all the rail players. I mean, we have the Falcon out there with Canadian National that's working well. We have the same lanes, same markets with the CSX that we do with Norfolk and Southern. So I want to make sure that's clear and we aren't doing anything prior to the actual merger that takes place. Having said that, at the same time, yes, we are able to look at new markets out there. We talked about, or I talked about just recently, the market into Louisville. Again, that's all aimed at over-the-road traffic that we're trying to win. We have the same approach with all the rails. The second thing is, and I want to be crystal clear on this, absolutely we want to make sure our customers have optionality. We're going to completely support UMAX. That product is a strong, viable product that our customers are utilizing today. That's not going away. and we see it as a viable option in the marketplace. Thank you very much.
Good morning. Good morning, Jim. Good morning, team. Thanks for taking the question. Maybe a quick one for Kenny, then a follow-up for Jim. So, Kenny, just looking at the intermodal, it looks like there's some share shift between yourself and other Western competitors if we look at just an originated basis. I know there's a lot of moving parts with international and domestic, but I wanted to see if we're reading that correctly. And then, Jim, you mentioned that the customers are lining up. There's a good amount of support, but one that's been pretty vocal. Obviously, maybe this is the Starbucks example you're referring to, but the chemical shippers in the Gulf Coast, they've been a lot…
Okay. So on the associations, the chemical association that you mentioned, last time I looked, they don't pay any of our bills. They don't have a direct relationship with us. And we are dealing with our customers. And that, for me, is really important. Do we have to understand what the associations are saying and what they're doing in Washington, D.C., and what their story is? But, again, it's truly amazing that they know already. That gives you an idea of where they're coming from, what we're putting into the merger document, and what we're doing with access to CSX, access to Burlington Northern or Brookshire on the way westbound. and access to the other railroads, whether it's the short lines that we operate with and handle, whether it's Canadian National or Canadian Pacific. So at the end of the day, you know, we'll deal with them and we're more than willing to sit down with the associations and explain the benefit. And the benefit is 15 to 20% on their merchandise traffic, okay, moving. History will show them that the railroads have not increased price, and this is in general for all of the railroads, at the same level as the liability issue has crept up and what that would cost us and also what we're pricing for the product that they're selling. So that's why we like to talk to the big shippers that we have. And when we talk to the big shippers, they understand it. But you know what, it's a little bit, and especially for the associations, is there's a trough out there, and they're trying to see what they can get with it. We've spent a lot of time with, and when we explain what we're doing with the political and regulatory people, they start to see. So you're talking, Jim and Kenny and Eric and Jennifer, so you're saying you're going to be faster, really, so they need less cars now. They need less expense, less inventory expense. Hold it. You're going to be able to move across the country 15% to 20% quicker. You mean you're going to remove 1,000 trucks of rail-to-rail or our portion of it in Chicago and other places that today runs on the highway instead of going rail-to-rail so we have less trucks on the road? Oh, you're looking at forward and how we're going to do, okay, to compete against trucks where technology is changing quick. If anybody wants to go take a look at what trucks are doing now to become more autonomous as they move ahead, let's go to …
Truck production is down about 28%, which could lead to a tightening of truck capacity and eventually support intermodal pricing and volume. — A structural reduction in truck supply could shift freight back to rail, benefiting intermodal networks across the industry.
“we have the same lanes, same markets with the CSX that we do with Norfolk and Southern”
Hey, good morning, guys, and thanks for fitting me in here. So, Kenny, a couple months ago, UP and Norfolk put out some marketing material around enhanced collaboration in the network. I was wondering if you could maybe talk a little bit about how those changes are being made and how that level of integration would compare to maybe a post-merger world. And then if you have any comments on kind of what you're thinking about doing with the UMAX program longer term, we'd love to hear kind of some more perspective from you on that.
Thanks. Yeah, so let me just first off and say, you know, we have alliances that we're working with with all the rail players. I mean, we have the Falcon out there with Canadian National that's working well. We have the same lanes, same markets with the CSX that we do with Norfolk and Southern. So I want to make sure that's clear and we aren't doing anything prior to the actual merger that takes place. Having said that, at the same time, yes, we are able to look at new markets out there. We talked about, or I talked about just recently, the market into Louisville. Again, that's all aimed at over-the-road traffic that we're trying to win. We have the same approach with all the rails. The second thing is, and I want to be crystal clear on this, absolutely we want to make sure our customers have optionality. We're going to completely support UMAX. That product is a strong, viable product that our customers are utilizing today. That's not going away. and we see it as a viable option in the marketplace. Thank you very much.
Jim Vena dismisses BN's opposition to the merger, implying Berkshire's resources don't change the competitive dynamics, and that BN's stance is self-serving.
Hey, thanks, guys. So maybe just, Jim, to ask it more directly, BN is the one rail that seems publicly opposed to the merger. In the past, maybe that has mattered. Do you think that rail opposition matters um today you know given all the other sort of puts and takes um uh as relates to this merger and then maybe just separately if i can jennifer um the yields ex-fuel were up three and a half percent um i know there's maybe a little bit of mix here but like it feels like we're like now more clearly in a positive price cost backdrop like does that continue um any reason to think that that isn't sustainable Looking ahead. Thank you.
Okay. I might as well start, and then, Jennifer, you can jump in. Appreciate the double question there, Scott. That was pretty slick. That's what I like about you. So let's talk about the other railroads, and you specifically talked about BN. And listen, BN is a great company, has a great franchise, has a long history, and we compete with them every day, and we compete hard. And if I was in their shoes, if I was the leader of both in northern Santa Fe, or I guess just like Union Pacific Railroad's subsidiary of Union Pacific Corp., they're a subsidiary of Behemoth called Berkshire, you know, with $350 billion. So they can do whatever they want, whether they want to buy something or not buy something. And maybe if I was there, I would phone up the big boss and say, we need to do this because it's better for the country and better for us. But if I take a look at it like I started, Scott, is they have to react to what we've done. We're the first mover to truly deliver. And I would see the benefit if I was outside of this merger. And how do I gain the most for myself? And that's what is at this point they don't want to do anything, so they're looking at it as a way, and that's what the other railroads are doing, is looking at a way that they can benefit. The problem that they have is this time it truly is an end-to-end bolt-on. It is not a big overlap. So that story of I need access to the railroad just doesn't fit. On top of that, Scott, as an industry, too long, we've wanted to open up a coffee shop inside a Starbucks because we're afraid to spend our own money to build in. So you think about that. I want a new coffee shop in New York City, and I'm going to walk over to Starbucks and say, seeing as you've got a real nice store, would you let me open up my own counter in your store? No. Open your own counter because if you have enough money, open it across the street if you want, but you pay your expenses. So the way we look at it is when the railroads come up and say very sort of misleading positions, it helps us. The STB and the members that are there now are very smart. They know we're not going to remove 300 lanes of traffic, okay? They know that we're going to have more options for our customers, not less. So at the end of the day, They're fighting a good fight, trying to make the noise, but the STB in our case is so strong that I'm very comfortable that …
Union Pacific secured over 400 customer letters of support for the Norfolk Southern merger, indicating strong shipper endorsement that may reduce regulatory risk.
Yeah, I just want to reaffirm something you said, Jim. You know, about 40% of our business either comes into or moves out of Union Pacific, so we're competing globally. But absolutely, I mean, we have over 1,200 stakeholders. Those are ports, you know, government officials. They're short lines. But if you just look at the customers, we've got over 400 customers that have sent in a letter of support, and there's still a pipeline behind that. And they run the gamut. They represent all the industries that we serve. Okay. Tom, thank you very much.
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