With a potential blockbuster merger reverberating in the background of the railroad industry, featuring competing bids for Kansas City Southern (KSU) from Canadian National Railway (CNI) and Canadian Pacific (CP), Union Pacific (UNP) is making its own headlines today. Unfortunately, the news isn’t overly positive as the company reported 1Q21 results that did not meet analysts’ expectations. In fact, UNP’s $0.14/share miss on the bottom-line portrays its worst miss in over five years.Following downside earnings reports from peers KSU and CSX (CSX), expectations were reset a bit lower heading into UNP’s report, explaining the relatively mild reaction in the stock today. Also mitigating the potential losses is the premise that the outlook for UNP and the industry overall is brightening due to improving economic conditions. The fact that UNP reaffirmed its FY21 guidance, despite missing Q1 EPS expectations by a broad margin, is evidence to that claim.However, based on the 1% drop in carload volumes in Q1, it’s evident that the recovery from the pandemic-oriented downfall that crippled UNP has yet to fully materialize. Drilling down on the certain areas of weakness, consistent laggard coal experienced a 19% drop in freight revenues, while metals and minerals dove by 20%. Production curtailments seen across major auto OEMs due to chip shortages was a likely factor behind the 15% decline in automotive freight revenues, nearly matching the 16% drop reported by CSX.On a positive note, grain and grain products increased 11% and forest products squeezed higher by 4% on strength in the housing market.