UNP · Earnings call · 2026Q3T · Full report

Operating Margin Drivers

UNION PACIFIC CORP · 2026-10-22 · Importance 58 · Surprise 56

The reported third-quarter operating ratio was 58.8%, while the core operating ratio improved 110 basis points year over year after excluding fuel-price effects and merger costs. Higher fuel prices were a major headwind: the $4.21-per-gallon average, up from $2.56, added 140 basis points to the operating ratio. Management attributed underlying improvement to 6% volume growth, productivity, and efficient resource use, including 5% higher workforce productivity and a 2% lower fuel-consumption rate. The company affirmed that it expects to improve its core operating ratio in 2026, while higher fuel prices continue to challenge the reported ratio.

Key facts

• UNION PACIFIC CORP expected year-over-year improvements in its core operating ratio to continue, supported by efficiently moving volume growth.
• Excluding fuel price impact and merger costs, UNION PACIFIC CORP's core operating ratio improved 110 basis points year over year in Q3 2026.
• UNION PACIFIC CORP reported Q3 2026 EPS of $3.49 and adjusted EPS of $3.53 after adjustment for merger costs; its operating ratio was 58.8%.