Union Pacific, CSX Ride Freight Rebound to Record Quarters

Two of the biggest US freight railroads posted record third-quarter results this week. Surging intermodal traffic and higher fuel surcharges more than offset a sharp rise in diesel costs.

Union Pacific Corp. said on Thursday that revenue rose 15% to $7.2 billion, driven by a 6% increase in carloads and firmer pricing. Adjusted earnings climbed 15% to 3.53 dollars a share, and intermodal revenue jumped 27%. The railroad’s operating ratio, a key efficiency measure where lower is better, improved slightly to 59.1%, even though higher fuel prices added about 140 basis points.

Chief Executive Officer Jim Vena said the Omaha-based company “executed at a consistently high level.” Union Pacific reaffirmed its target of high-single-digit earnings growth for 2026. It booked 22 million dollars in costs tied to its proposed takeover of Norfolk Southern Corp., which still awaits regulatory approval. “We look forward to the upcoming steps of the Surface Transportation Board’s merger review process,” Vena said.

A day earlier, CSX Corp. reported record revenue of $4.02 billion, up 12%, as total volumes rose 5% and intermodal shipments gained 7%. Net income climbed to 1.05 billion dollars from 694 million a year earlier. Its operating margin widened by 880 basis points to 39.1%.

The Jacksonville, Florida-based carrier raised its full-year revenue growth forecast to high single digits, from mid-to-high single digits. Chief Executive Officer Steve Angel said he was confident of delivering operating margin expansion of more than 350 basis points this year. “The hard work of our railroaders has positioned us well as we enter the fourth quarter,” he said.

The results come as freight recovers across the network. US weekly rail traffic was running more than 7% ahead of a year earlier in mid-October, according to the Association of American Railroads.