Union Pacific’s first quarter results were met with a negative market reaction, as revenue and adjusted earnings per share came in below Wall Street expectations. Management identified a combination of robust carload growth, the strongest core pricing in a decade, and operational productivity improvements as positives, but noted these were offset by unfavorable business mix and external pressures such as lower fuel surcharges and the leap year impact. CFO Jennifer Hamann emphasized that while “strong volume growth” and “record quarterly workforce productivity” drove freight revenues, the benefits were tempered by “lower volumes in our higher average revenue per car businesses like petroleum, soda ash, and finished vehicles.”
Is now the time to buy UNP? Find out in our full research report (it’s free).
Union Pacific (UNP) Q1 CY2025 Highlights:
- Revenue: $6.03 billion vs analyst estimates of $6.07 billion (flat year on year, 0.8% miss)
- Adjusted EBITDA: $2.98 billion vs analyst estimates of $3.05 billion (49.5% margin, 2.2% miss)
- Operating Margin: 39.3%, in line with the same quarter last year
- Market Capitalization: $132.9 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions Union Pacific’s Q1 Earnings Call
- Chris Wetherbee (Wells Fargo) asked about the impact of macro uncertainties on 2025 guidance, to which CEO Jim Vena replied that while the company is standing by its three-year targets, the environment is “fluid” and requires ongoing agility.
- Fadi Chamoun (BMO Capital Markets) inquired about the sustainability of pricing strength, with CFO Jennifer Hamann attributing gains to both “catch-up” on long-term contracts and improved service, while Executive Vice President Kenny Rocker emphasized the commitment to pricing discipline.
- Brandon Oglenski (Barclays) raised concerns about tariffs on Chinese imports and potential volume declines at West Coast ports. Rocker noted ongoing customer conversations and the company’s readiness to adjust to changing trade flows, while EVP Eric Gehringer detailed how adaptive planning supports rapid operational adjustments.
- Scott Group (Wolfe Research) questioned why margin gains were limited despite strong volumes and pricing. Hamann explained that the negative impact of business mix and fuel outweighed the benefits, but anticipated that these headwinds could moderate later in the year.
- Jonathan Chappell (Evercore ISI) asked about managing resources for intermodal volatility. Gehringer outlined the use of technology and a resource buffer to adjust train operations efficiently, maintaining service levels while controlling costs.
Catalysts in Upcoming Quarters
In the coming quarters, the StockStory team will be watching (1) whether business mix improves as domestic and higher-margin segments gain traction, (2) the evolution of tariff and trade policy impacts on intermodal volumes, and (3) the company’s ability to sustain core pricing gains while navigating volatile demand. Additionally, execution on automation initiatives and new customer wins will be important indicators of Union Pacific’s progress.
Union Pacific currently trades at $223.50, up from $219.60 just before the earnings. At this price, is it a buy or sell? Find out in our full research report (it’s free).
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