Union Pacific's (NYSE: UNP) second-quarter record financial results signal improved rail intermodal capacity and service reliability for shippers, as the railroad posted its best-ever revenue, operating income, and net income.
“Strong execution and volume growth enabled another successful quarter and record financial results,” Chief Executive Jim Vena said in a statement.
Record Financial Results
The Omaha-based railroad saw revenue rise 12% year-over-year to $6.86 billion, while operating income grew 9% to $2.8 billion. Adjusted earnings per share increased 13% to $3.41. “Put it all together, we had a record quarter,” Chief Financial Officer Jennifer Hamann said on the earnings call, with new marks set for revenue, operating income, and net income.
| Metric | Q2 2026 | Year-over-Year Change |
|---|---|---|
| Revenue | $6.86 billion | +12% |
| Operating income | $2.8 billion | +9% |
| Adjusted EPS | $3.41 | +13% |
| Operating ratio | 59.7% | +0.7 points |
| Operating expenses | – | +13% |
Operating expenses increased 13% due to inflation, higher volume, and costs related to the proposed merger with Norfolk Southern (NYSE: NSC).
Volume Growth Across Segments
Overall volume increased 2% for the quarter. Premium business, which includes intermodal and automotive, rose 4%, driven almost entirely by intermodal. Industrial products volume grew 3%. Bulk business declined 1% as a 12% increase in grain traffic was partially offset by a 14% drop in coal volume.
“Domestic intermodal delivered its fourth consecutive record quarter in both volume and revenue. It’s evident our outstanding service set the foundation to grow the business, and that’s exactly what we’re doing,” said Kenny Rocker, executive vice president of marketing and sales. He noted that private asset, rail asset, and parcel volumes were all up double digits, benefiting from constrained truck capacity and share gains.
Operational Metrics and Service Improvements
Union Pacific improved key service metrics in the second quarter:
- Average car miles per day increased 5% to 231
- Terminal dwell declined 7% to 19.7 hours
- Average train speed rose 3% to 24.7 mph
“We delivered record second quarter operating performance, ran a fluid network, and improved safety all while handling 2% more volume,” said Eric Gehringer, executive vice president of operations. The railroad also achieved record workforce productivity with a 2% decline in train and engine crew headcount, along with records for train length and fuel consumption. Terminal dwell tied a company record. Safety performance improved, though the railroad did not disclose specific employee injury or train accident rates.
Outlook and Implications for Shippers
UP now expects high single-digit percentage growth in full-year earnings per share, up from its prior forecast of mid single-digit growth, reflecting an improved economic forecast that shifted from muted to mixed. The railroad has a positive outlook for all major traffic segments except coal, which faces headwinds from high power plant stockpiles and lower natural gas prices.
For freight forwarders and intermodal shippers, Union Pacific's record intermodal volume and improved service metrics indicate available capacity and reliable transit times. The double-digit growth in private asset, rail asset, and parcel volumes suggests that the railroad is successfully capturing truck-freight conversions. However, shippers should monitor the proposed merger with Norfolk Southern, as associated costs contributed to higher operating expenses and the operating ratio increase.
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