Union Pacific beats Q3 estimates as fuel surcharges lift revenue 15%; shares rise

Union Pacific (UNP) reported third-quarter 2026 adjusted diluted EPS of $3.53, up 15% from $3.08, and GAAP diluted EPS of $3.49, up 16%. The adjusted figure topped the $3.48 consensus cited by TheFly ($3.47 per MarketBeat), a beat of about 1.7%. Operating revenue grew 15% to $7.2 billion.

The headline revenue growth overstates the underlying demand. Freight revenue excluding fuel surcharges rose 6%, in line with 6% growth in revenue carloads, with intermodal up 11%. Fuel surcharge revenue nearly doubled to $1.2 billion because the average fuel price jumped to $4.21 a gallon from $2.56 a year earlier. The same fuel move drove fuel expense up 69% to $1,040 million from $616 million (Zacks put it at 68.8% ) and added about 140 basis points to the operating ratio, which was 59.1% reported versus 59.2% a year earlier, and 58.8% adjusted versus 58.5%. Management expects fuel to average about $4.85 a gallon in the fourth quarter.

Union Pacific affirmed its outlook for high-single-digit reported EPS growth in 2026 and updated its capital plan to $3.5 billion. CEO Jim Vena said the company looks forward to the next steps of the Surface Transportation Board's review of its pending merger with Norfolk Southern (NSC); adjusted EPS excludes merger costs. The shares closed up 3.55% at $298.08 on Oct. 22. What to watch: whether volume growth near 6% holds into the fourth quarter as fuel costs climb further, and the STB merger timetable.