America's largest railroad by route mileage, Union Pacific hauls freight across 23 western states, moving grain, coal, chemicals, cars, and intermodal containers between West and Gulf Coast ports and Midwest and Eastern gateways. Founded in 1862 by the Pacific Railway Act signed by Abraham Lincoln, it built the eastern half of the first transcontinental railroad, meeting the Central Pacific in Utah, where the famous golden spike was driven in 1869. Its name reflects its mission: linking the Union with the Pacific.
Q2 2026 freight revenue rose 12% to $6.5B on fuel surcharges, but operating ratio worsened to 59.7%.
Fuel prices drove Union Pacific's costs up faster than for the first time in a year. Revenue rose 3.2% to $6.217B and rose 6.3% to $2.87 versus a year ago, but the worsened 0.7 points to 59.7% as a 63% increase in diesel fuel costs lifted expenses 13%. The company carries the fuel squeeze into a pending acquisition with buybacks still paused.
Key takeaways
Freight rose 12% to $6.5B, driven by higher revenue of $1.0B versus $569M a year earlier, 2% volume growth, and core pricing gains, partially offset by unfavorable business mix.
rose 9% to $2.8B, but the worsened 0.7 points to 59.7% as operating expenses rose 13% to $4.1B, led by a 60% increase in average diesel fuel price to $3.86 per gallon plus inflation, volume costs, and acquisition-related expenses.
Domestic intermodal carloads rose 19% while international intermodal fell 14% and coal fell 17%, leaving total carloads up 2%.
Section summaries
Management's Discussion and Analysis
Union Pacific Q2 2026 freight revenue rose 12% on higher fuel surcharges, 2% volume growth, and core pricing, but operating ratio deteriorated to 59.7%.
⌄
Freight increased 12% to $6.5 billion, driven by higher revenue ($1.0 billion vs. $569 million), 2% volume growth, and core pricing gains, partially offset by unfavorable .
grew 21% to $5.5B in H1 2026 and was $1.8B; remain paused pending the Norfolk Southern acquisition.
The 2026 is approximately $3.3B, focused on safety, network resiliency, growth projects, and locomotive fleet modernization.
What changed
Q2 2025 flagged domestic intermodal and automotive lag and Premium down 4%; this quarter domestic intermodal rose 19% while Premium was not separately stated but international intermodal fell 14%.
Coal had grown 30% in Q2 2025 and 12% in Q1 2026; Q2 2026 coal carloads fell 17%, reversing that trend.
International intermodal declined 17% in Q3 2025 and 9% in Q1 2026; the 14% Q2 2026 drop continues the fade of the West Coast import shift.
had improved to 59.0% in Q2 2025 and 60.5% in Q1 2026; the Q2 2026 worsening to 59.7% ends the sequential improvement as fuel costs rose.
Buybacks stayed paused as flagged in Q1 2026 and FY 2025, with the Norfolk Southern acquisition still pending and no repurchases resumed.
Environmental remediation with EPA and state agencies remains undisclosed as to exposure, unchanged from Q1 2026 and FY 2025.
What to watch
Q3 2026 as the $3.3B and wage inflation test the 59.7% level against fuel cost trajectory.
Coal carload trend after the 17% Q2 decline reversed prior-year growth.
International intermodal volume after the 14% Q2 drop extended the post-import-shift decline.
STB approval and closing of the Norfolk Southern acquisition, including the $2.5B termination fee if rejected.
rose 9% to $2.8 billion, but the worsened 0.7 points to 59.7% as a 13% increase in operating expenses—led by a 63% jump in fuel costs—outpaced growth.
Volume growth was led by a 19% surge in domestic intermodal, while international intermodal and coal carloads fell 14% and 17%, respectively; overall carloads increased 2%.
Operating expenses rose 13% to $4.1 billion, primarily due to a 60% increase in average diesel fuel price to $3.86 per gallon, along with inflation, volume-related costs, and acquisition-related expenses.
grew 21% to $5.5 billion in H1 2026; was $1.8 billion, and the company paused share repurchases pending the Norfolk Southern acquisition.
The company expects a 2026 capital plan of approximately $3.3 billion, focusing on safety, network resiliency, growth projects, and locomotive fleet modernization.
Quantitative and Qualitative Disclosures About Market Risk
There were no material changes to the Quantitative and Qualitative Disclosures About Market Risk previously disclosed in our 2025 Annual Report on Form 10-K.
⌄
There were no material changes to the Quantitative and Qualitative Disclosures About Market Risk previously disclosed in our 2025 Annual Report on Form 10-K.
The company discloses environmental remediation proceedings with the EPA and state agencies but cannot estimate ultimate costs.
⌄
The company receives notices from the EPA and state agencies alleging liability for remediation costs at various U.S. sites, including Superfund sites.
It cannot predict the ultimate impact due to multiple potentially responsible parties, varying contamination, scarce volumetric data, and speculative remediation costs.
No other material pending legal proceedings are described beyond ordinary routine litigation.
The company routinely assesses liabilities and contingencies with input from third-party advisors when necessary.
Further details on environmental claims and estimated remediation costs are in the 2025 10-K.
For a discussion of our potential risks and uncertainties, see the risk factors disclosed in our Form 10-K for the year ended December 31, 2025. These risks could materially and adversely affect our business, financial condition, results of operations (including revenues and pro…
⌄
For a discussion of our potential risks and uncertainties, see the risk factors disclosed in our Form 10-K for the year ended December 31, 2025. These risks could materially and adversely affect our business, financial condition, results of operations (including revenues and profitability), and/or stock price. Our business also could be affected by risks that we are not presently aware of or that we currently consider immaterial to our operations.