Pacific Union (NYSE: UNP) and Westinghouse Air Brake Technologies Corporation (NYSE:WAB) Shares are rising on Wednesday after the companies struck a deal for the largest investment in locomotive modernization in the history of the rail industry.
The companies struck a deal for $1.2 billion to modernize the railroad’s AC4400 locomotives.
Details
This agreement, signed in the fourth quarter of 2025, represents Union Pacific’s fourth major modernization order with WAB since 2018.
Once completed, the railway fleet will include more than 1,700 modernized locomotives. Production will take place at Wabtec’s US facilities, with deliveries starting in 2027.
This groundbreaking deal builds on Union Pacific’s previous 2022 order, which is expected to be completed in 2026.
Advantages
The upgraded fleet is expected to help improve the railway’s operational efficiency, service reliability and network performance.
WAB’s modernization program is expected to extend the service life of each locomotive, improve fleet standardization and enable Union Pacific to leverage next-generation control and diagnostic technologies.
The improvements are expected to reduce fuel consumption by more than 5%, increase traction by 14% and improve reliability by 80%.
Union Pacific’s subpar earnings results
Last month, Union Pacific reported fourth-quarter adjusted earnings per share of $2.86, missing analysts’ estimates of $2.87, and operating revenue fell 1% to $6.09 billion, missing analysts’ estimates of $6.12 billion.
The company reported an operating ratio (OR) of 60.5%, 180 basis points worse, and adjusted OR was 60.0%, 190 basis points worse.
Price promotion: Shares of Union Pacific rose 2.78% to $248.20 and shares of Westinghouse Air Brake rose 1.33% to $239.41 at time of publication on Wednesday, according to data from Benzinga Pro.
Photo by sockagphoto via Shutterstock
#Union #Pacific #WAB #Enter #Largest #Locomotive #Modernization #Deal #Union #Pacific #NYSEUNP