Union Pacific vs. CSX: a 59.8% operating ratio against 67.9%, a pending Norfolk Southern deal and a new CEO at CSX

Union Pacific runs a freight railroad across the western two-thirds of the United States, 32,889 route miles in 23 states; CSX runs about 20,000 route miles in the East. They do not compete for the same freight, so comparing them is comparing two ways of running the same business. At the October 23, 2026 close Union Pacific was worth $174.0 billion and CSX $93.6 billion. Both reported their third quarter this week.

The railroad yardstick: operating ratio

Railroads are judged by their operating ratio, operating expenses as a share of revenue. Union Pacific reports it: 59.8% in 2025, against 59.9% in 2024 and 62.3% in 2023. CSX reports an operating margin instead, 32.1% in 2025 against 36.1% in 2024, which is an operating ratio of 67.9%. In the third quarter of 2026 the gap nearly closed: 59.1% at Union Pacific and a 39.1% margin, or a 60.9% ratio, at CSX.

CSX’s 2025 was weighed down by cheaper export coal, lower merchandise volume and lower fuel recovery, its 10-K says, along with a $164 million goodwill write-down at Quality Carriers, its chemical trucking subsidiary, and congestion from work on the Howard Street tunnel in Baltimore. It also spent about $470 million rebuilding its Blue Ridge line after Hurricane Helene, which is capital spending and lowered its free cash flow.

The third quarter of 2026

Union Pacific’s revenue rose 15% to $7.2 billion and diluted EPS 16% to $3.49, with carloads up 6%. CSX’s revenue rose 12% to a record $4.02 billion and EPS 54% to $0.57; against last year’s quarter without the goodwill write-down, EPS rose 30%. Both companies said higher fuel surcharges helped revenue, and Union Pacific said higher fuel prices worsened its operating ratio by 1.4 points.

The Norfolk Southern deal

Union Pacific agreed on July 28, 2025 to buy Norfolk Southern: each Norfolk Southern share would become one Union Pacific share plus $88.82 in cash, about 225 million new shares and $20 billion in cash in all. Shareholders of both approved it in November 2025, but it still needs the Surface Transportation Board, which rejected the first application as incomplete in January 2026 and accepted a revised one. Union Pacific now expects to complete the deal in the second half of 2027, and it has paused share buybacks in the meantime.

Buybacks, dividends and $1,000

From 2016 to 2025 Union Pacific spent $43.3 billion on buybacks and CSX $26.7 billion, cutting their diluted share counts by 28.6% and 34.1%. Dividends per share grew 2.41 times at Union Pacific, to $5.44 in 2025, and 2.17 times at CSX, to $0.52 (adjusted for CSX’s 2021 three-for-one split).

The lead depends on the window. Over five years Union Pacific was ahead at 42 of 61 month-ends, but CSX has led since December 2025. Over ten years CSX was ahead every month; over twenty, Union Pacific led at 234 of 241 month-ends. Both beat the S&P 500 over 20 years, and neither did over five.

Fund managers and insiders

Eleven of the 38 managers this site tracks held Union Pacific at the end of June, all with more than $1 million, and eight held CSX. In the second quarter Andreas Halvorsen’s Viking sold all 18.7 million of its CSX shares and opened a $557 million Union Pacific position, now the largest among the 38; its filings do not say why. Ken Griffin’s Citadel raised its CSX stake 7.3 times and became the largest CSX holder among them, and Steve Cohen’s Point72 more than tripled its Union Pacific position.

CSX chief executive Steve Angel, who ran Linde until 2022 and joined CSX in September 2025, bought $1.01 million of stock in the market on March 6, 2026 at $40.27 a share; the stock closed at $50.79 on October 23. CSX insiders sold $16.6 million over twelve months, none of it under a 10b5-1 trading plan. At Union Pacific no insider bought and executives sold $9.25 million. Both railroads also announced this month that a senior executive will retire: Union Pacific’s chief financial officer Jennifer Hamann in early 2027, and CSX’s chief operating officer Mike Cory.

Two years distort the earnings history. In 2017 the tax reform cut both companies’ deferred tax liabilities, a non-cash gain of $5.9 billion at Union Pacific and $3.5 billion at CSX. In 2020 revenue fell 10.0% at Union Pacific and 11.3% at CSX; CSX’s 10-K says the COVID-19 pandemic significantly impacted its volume. CSX figures before 2021 are adjusted for the three-for-one split.

The figures come from the companies’ 10-K and 10-Q filings, the third-quarter releases and the 13F, Form 4 and Form 144 filings. They describe what happened; they are not a forecast and not investment advice.