UNP Q2 2026: Record EPS $3.41, Guidance Raised as Norfolk Southern Merger Clears Key Hurdles

Transcript intelligence

What changed

Compared to Q1 2026, Union Pacific improved its operating ratio from 59.9% to 59.2%, grew net income from $1.7B to $2.0B, and raised full-year EPS guidance from mid-single-digit to high-single-digit growth. The Norfolk Southern merger transitioned from a delayed filing to STB acceptance of the completed application, and a new Canadian National settlement agreement provided EJ&E and Mexico access not present in the prior quarter. Freight car velocity reached a record 231 miles per day, up 5% year-over-year.

Guidance delta

Raised. Full-year EPS growth guidance increased from mid-single-digit (Q1 2026) to high-single-digit growth (Q2 2026). Capex outlook remains increasing.

Key takeaways

• Record Q2 EPS of $3.41 beat consensus of $3.20 by 6.6%; revenue of $6.86B topped estimates by 2.2%.
• Operating ratio improved to 59.2% from 59.9% in Q1, reflecting productivity gains and pricing above inflation.
• Full-year EPS guidance raised to high-single-digit growth from mid-single-digit.
• Norfolk Southern merger advanced: STB accepted the application as complete on May 28, with supplemental filings and hearings ahead.
• Canadian National settlement agreement expands EJ&E and Mexico gateway access, a new strategic development.
• Freight car velocity reached a record 231 miles per day, up 5% year-over-year.

Management priorities

• Advancing the Norfolk Southern merger through the STB regulatory process, including supplemental filings and hearings.
• Opening a new grain export facility in Grays Harbor, Washington to capture export demand.
• Executing capital projects including the $125M Houston complex, Pacific Northwest siding extensions, and the Sunset double-track project.
• Expanding open gateway interchanges and leveraging the Canadian National agreement for Mexico traffic.
• Continuing safety and productivity investments, including AI-driven dispatch and terminal platforms.