Executive Summary
Union Pacific delivered a solid QQ2 2025 performance with resilient demand and continued focus on cost discipline and capital allocation. Revenue for the quarter was $6.154 billion, up 2.45% year over year, with gross profit of $2.837 billion and a net income of $1.876 billion, translating to earnings per share (EPS) of $3.16 (diluted $3.15). Operating income reached $2.518 billion, yielding an operating margin of approximately 40.9%. These results reflect a constructive operating environment for a large North American Class I railroad, supported by favorable mix and disciplined expense management, even as the business remains exposed to cyclicality inherent in industrial volumes.
Free cash flow remained robust at about $1.397 billion for the quarter, supported by operating cash flow of $2.333 billion and capital expenditures of $0.936 billion. The company allocated capital to shareholder returns, with net share repurchases of approximately $0.959 billion and dividends paid of about $0.795 billion in the period, contributing to a payout structure that complements a sustainable balance sheet. Despite meaningful debt levels, Union Pacific maintains a strong liquidity position with cash and cash equivalents around $1.06 billion and total debt of roughly $33.956 billion, yielding a net debt position of about $32.896 billion. The quarter’s results underscore Union Pacific’s ability to translate volume activity and pricing into earnings while maintaining a focus on efficiency and investment in the network.
Key Performance Indicators
Key Insights
Revenue: $6.154B, YoY +2.45%, QoQ +2.11%; Gross Profit: $2.837B, YoY +4.00%, QoQ +3.92%; Operating Income: $2.518B, YoY +5.27%, QoQ +6.20%; Net Income: $1.876B, YoY +12.13%, QoQ +15.38%; EPS (GAAP): $3.16, YoY +14.91%, QoQ +16.80%; Gross Profit Margin: 46.10%, Operating Margin: 40.92%, Net Margin: 30.48%; EBITDA: $3.268B; D&A: $0.620B; Interest Expense: $0.335B; Cash Conversion: Free Cash Flow $1.397B, Operating Cash Flow $2.333B; Payout Ratio: 42.4%; Free Cash Flow per Share: $2.35; Operati...
Financial Highlights
Revenue: $6.154B, YoY +2.45%, QoQ +2.11%; Gross Profit: $2.837B, YoY +4.00%, QoQ +3.92%; Operating Income: $2.518B, YoY +5.27%, QoQ +6.20%; Net Income: $1.876B, YoY +12.13%, QoQ +15.38%; EPS (GAAP): $3.16, YoY +14.91%, QoQ +16.80%; Gross Profit Margin: 46.10%, Operating Margin: 40.92%, Net Margin: 30.48%; EBITDA: $3.268B; D&A: $0.620B; Interest Expense: $0.335B; Cash Conversion: Free Cash Flow $1.397B, Operating Cash Flow $2.333B; Payout Ratio: 42.4%; Free Cash Flow per Share: $2.35; Operating Cash Flow per Share: $3.93; Cash at End of Period: $1.083B; Total Assets: $68.576B; Total Liabilities: $52.318B; Total Stockholders’ Equity: $16.258B; Debt to Capitalization: 0.676; ROE: 11.5%; ROA: 2.74%; Current Ratio: 0.648; Quick Ratio: 0.528.
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
6.15B |
2.45% |
2.11% |
| Gross Profit |
2.84B |
4.00% |
3.92% |
| Operating Income |
2.52B |
5.27% |
6.20% |
| Net Income |
1.88B |
12.13% |
15.38% |
| EPS |
3.16 |
14.91% |
16.80% |
Key Financial Ratios
operatingProfitMargin
40.9%
operatingCashFlowPerShare
$3.93
freeCashFlowPerShare
$2.35
dividendPayoutRatio
42.4%
Management Commentary
No earnings call transcript data was provided in the material. Consequently, there are no management quotes to excerpt for themes such as strategy, operations, or market conditions. If a transcript becomes available, a thematic synthesis will be added, grouping quotes by themes (e.g., pricing discipline, volume trends, cost control, capital allocation, and market outlook) with contextual significance.
Forward Guidance
There is no formal forward guidance disclosed in the provided data. Based on the QQ2 2025 results and the current macro environment, the outlook hinges on several factors: (1) volume recovery and mix in freight and intermodal segments, (2) pricing realization and yield management given competitive dynamics in North American rail, (3) continued efficiency gains and capital discipline to sustain free cash flow generation, and (4) interest rate and fuel price trajectories affecting operating costs and debt service. Management commentary (when available) would typically address targets for volume growth, yield improvement, capital expenditure cadence, and dividend/purchase plan trajectories. Investors should monitor quarterly volume trends, service metrics, working capital dynamics, and the trajectory of debt maturity profiles as critical indicators of sustainability and optionality.