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Call sheet · Q2'26

Union Pacific (UNP)

Q2'26 earnings call · held July 23, 2026 · compared with the Q1'26 call · management-credibility review
9/12
Disclosure score
3 medium, 4 low flags
Financial quality
Bottom line
Everyone will focus on record earnings, but the real story is UNP just proved they can absorb NS volumes by handling 10%+ domestic intermodal growth while actually improving velocity. The headline 59.2% OR masks a 58% core reality once you strip fuel. The binding constraint isn't capacity or execution, it's coal volumes and wage inflation, with Kenny admitting 'elevated inventory and lower natural gas prices will make for a challenging second half' after being bullish just 90 days ago. Most revealing quote: 'We would have never been able to get to this kind of deal with CN if it wasn't because of going through the merger.' My view changes if coal doesn't stabilize by Q4 or if wage inflation breaks above 7%.

The 30-second version

  • The sleeper: UNP just proved they can handle 10%+ domestic intermodal growth while IMPROVING velocity to 231 miles/day
  • The obvious: Record Q2 results with $3.41 adjusted EPS, but fuel is masking the real 58% core OR
  • The red flag: Coal guidance went from 'positive' to 'challenging second half' in 90 days

What changed this quarter

MetricQ1'26Q2'26Change
Revenue$6.2B (+3% YoY)$6.9B (+12% YoY)+900bps acceleration
Adjusted EPS$2.93 (+9% YoY)$3.41 (+10% YoY)Maintained double-digit growth
Operating Ratio59.9%59.2%+70bps improvement
Volume (carloads)-1% YoY+2% YoYFlipped positive after 3 quarters
Freight Car Velocity235 miles/day231 miles/day-4 miles but still Q2 record
Workforce Productivity+7% YoY+5% YoYDecelerated but still 8th consecutive record
Coal Volume+12% YoY-1% YoY1300bps deceleration
Domestic Intermodal VolumeRecord quarter4th consecutive record, double-digit growthAccelerating momentum
International Intermodal Volume-28% YoY-14% YoYSequential improvement
Free Cash Flow$630M$1.8B+186% sequential surge

Accountability tracked

7 new promises made4 narrative shifts flagged6 prior promises scored
Inside the full report
The complete write-up covers the full promise ledger with kept/missed calls, disclosure-quality scoring, the metrics-vanished check, verification items, and the questions to ask next quarter.
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Scores, kept-promise rates, and flags on this site reflect the author's opinion, applying a stated methodology to statements management made on public earnings calls. Informational and educational purposes only - not investment advice, a recommendation, or an offer to buy or sell any security. Sources believed reliable but not guaranteed; the author may hold positions in the securities discussed.

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