What You Need To Know
Union Pacific delivered strong financial and operational results in 2024. Fourth-quarter net income reached $1.8 billion, or $2.91 per share, up from $1.7 billion, or $2.71 per share, in 2023. Operating revenue declined slightly to $6.1 billion, despite a 5% increase in carloads, due to lower fuel surcharge revenue and an unfavorable business mix. The operating ratio improved to 58.7%, while operating income rose 5% to $2.5 billion. Workforce productivity and fuel efficiency also showed gains.
For the full year, Union Pacific reported net income of $6.7 billion, or $11.09 per share, up from $6.4 billion, or $10.45 per share, in 2023. Operating revenue grew 1% to $24.3 billion, driven by higher volumes and core pricing gains. The operating ratio improved to 59.9%, and operating income increased 7% to $9.7 billion. The company invested $3.4 billion in its capital program and repurchased 6.3 million shares for $1.5 billion. Productivity improvements were evident across freight car velocity, workforce efficiency, and locomotive performance, alongside better safety metrics.
Looking ahead to 2025, Union Pacific aims to achieve high-single to low-double-digit earnings growth while maintaining its focus on operational excellence. The company plans to allocate $3.4 billion for capital investments and repurchase $4.0–$4.5 billion in shares, continuing its strategy of delivering strong returns and industry-leading efficiency.
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Why This Is Important for Retail Investors
Strong Earnings Growth: Union Pacific's increasing net income and earnings per share signal financial stability and growth potential, which can drive shareholder value.
Improved Efficiency: Gains in operating ratio, workforce productivity, and fuel efficiency highlight the company's focus on cost management and operational excellence, supporting long-term profitability.
Capital Allocation: Significant investments in infrastructure and share repurchases demonstrate a commitment to strengthening the business and returning value to shareholders.
Resilience in Challenging Conditions: Despite economic headwinds and mixed revenue trends, Union Pacific achieved record operating income, showcasing its ability to adapt and thrive.
Future Growth Outlook: The 2025 earnings growth target and continued focus on efficiency position Union Pacific as a potentially rewarding investment for retail investors seeking steady returns.