Union Pacific Corp (NYSE:UNP) stock fell 0.37% (As on January 28, 11:35:26 AM UTC-4, Source: Google Finance) after the company posted lower than expected results for the fourth quarter of FY25. The company said operating revenue fell by 1% from the year-ago quarter, on carloads that were 4% lower, partially offset by core pricing gains and fuel surcharge revenue. The railroad’s operating ratio for the fourth quarter was 60.5%, 180 basis points higher y/y. The company delivered adjusted fourth quarter 2025 net income of $1.7 billion compared to adjusted fourth quarter 2024 net income of $1.8 billion. Full year 2025 cash from operations totaled $9.3 billion, roughly flat to 2024, while the cash conversion declined 10 points as a result of higher cash capital and the4 significant gain on land sales at year-end.
Moreover, for the fourth quarter, reportable personal injury rate and reportable derailment rate both improved. Freight car velocity was 239 daily miles per car, a 9% increase. Average terminal dwell was 19.8 hours, a 9% improvement. Average train length was 9,729 feet, a 3% increase. Workforce productivity was 1,151 car miles per employee, a 3% improvement.
UNP in the fourth quarter of FY25 has reported the adjusted earnings per share of $2.86, missing the analysts’ estimates for the adjusted earnings per share of $2.90. The company had reported the adjusted revenue of $6.1 billion in the fourth quarter of FY25, missing the analysts’ estimates for revenue of $6.14 billion. The freight revenue declined by 1% on 4% lower volume. The company faced challenges in the competitive and global market environment, particularly in the agricultural sector. Fourth-quarter operating income declined by 5% to $2.4 billion compared to the record fourth quarter of 2024. Fuel surcharge revenue of $603 million increased $15 million, as higher year-over-year fuel prices added 75 basis points to freight revenue. Core pricing gains combined with business mix to drive 275 basis points of improvement to freight revenue.
Looking ahead, Union Pacific projects mid-single-digit growth in earnings for 2026. The company plans to invest $3.3 billion in capital spending and aims to improve its operating ratio further. Union Pacific is also focusing on a strategic merger with Norfolk Southern, expected to close in the first half of 2027, which could enhance its competitive position. For 2026, company expects the all-in compensation per employee to be up around 4%-5%.