The pressure: expensive energy, uneven demand
Third-quarter 2026 earnings calls are showing a common pattern. Companies are not waiting for demand or energy prices to improve. They are cutting costs, building cash and preparing for deals that have not yet closed. Two calls on October 22 show it most clearly: chemical maker Dow and railroad Union Pacific.
Union Pacific's fuel bill is the clearest example. Jennifer Hamann said on the call: "Fuel expense grew 69% on a 64% increase in average fuel price."1 That is a jump from $2.56 to $4.21 per gallon.1 Union Pacific's CEO, Vincenzo Vena, said "Higher fuel prices were a big cost driver."1 The company still reported record results. Net income was $2.1 billion and adjusted earnings per share grew 15% to $3.53, helped by 6% volume growth.1
Dow faces the same squeeze in Europe. Jeffrey Tate said: "Persistently high energy costs continue to challenge industry economics."2 The reporting also notes that record-low water on the Rhine disrupted logistics.2
Dow: the self-help bet
"Self-help" means a company improving its profits through its own actions, such as cutting costs, rather than waiting for the market to recover. Dow calls its programme Transform to Outperform. Tate said the Q3 sequential self-help improvement exceeded $150 million. He also said: "we remain focused on our commitment to implement approximately $1.3 billion in net benefits this year as well as $1.3 billion in 2027."2 He added: "our SARD was actually down $130 million,"2 a reference to a category of overhead costs the transcript abbreviates as SARD.
The reporting is not fully consistent on how the programme is described. The same earnings summary quotes Dow's CEO, Karen Carter, saying the company is on track for "approximately $700 million in growth and productivity improvements this year."2 It also says the programme includes cutting about 4,500 Dow roles, about 70% of which have been implemented.2 The $1.3 billion and $700 million figures may measure different things, such as net benefits versus gross productivity gains. The summary does not reconcile them. Readers should treat the two as separate figures until Dow clarifies.
The summary reports net sales up 13% year over year and operating EBITDA, a measure of operating profit, above $1.5 billion.2 Its headline says Dow expects about $1.5 billion of EBITDA in Q4.2 Tate said the usual fourth-quarter seasonal slowdown should be "largely offset by more than $100 million of lower sequential turnaround spending," meaning less money spent on planned plant shutdowns for maintenance.2 He also said Dow expects global polyethylene margins, the spread on a common plastic, to improve by about $0.02 per pound from Q3.2
Why the cost cuts matter: Dow's recent record
The urgency is clear in Dow's checked SEC filings. Revenue fell from $44.622 billion in fiscal 2023 to $42.964 billion in 2024 and $39.968 billion in 2025.3 Operating cash flow, the cash the business generates from its day-to-day operations, fell more steeply. It went from $5.196 billion in 2023 to $2.914 billion in 2024 and $1.032 billion in 2025.3 Earnings per share went from $0.82 to $1.57 and then to a loss of $3.70 in fiscal 2025.3 Cost of revenue fell from $39.742 billion to $37.435 billion over the same period,3 but it did not fall as fast as sales.
Balance sheets: cash, liquidity and debt
Dow ended the third quarter of 2025 with $4.609 billion of cash, up from $2.883 billion a year earlier.3 Cash was $4.110 billion at the end of Q1 2026.3 Tate said: "We have approximately $14 billion of liquidity and no substantive debt maturities until 2029."2 To put that in perspective, $14 billion is roughly a third of Dow's entire 2025 revenue of $39.968 billion.2,3 Q3 free cash flow, the cash left after running and maintaining the business, was $1.1 billion, according to Tate. He also described a working-capital improvement of about $1.3 billion and a 2027 cash-conversion target of 70% to 80%.2
Shares outstanding rose from 702.3 million in fiscal 2023 to 717.5 million in fiscal 2025, and stood at 720.7 million in Q1 2026.3 The checked filings show a slowly growing share count, not buybacks.
Union Pacific is also building cash. Hamann said: "We will continue growing our cash reserves in anticipation of closing the Norfolk Southern merger in the second half of 2027."1 The company is lifting 2026 capital spending to $3.5 billion and affirming high single-digit reported EPS growth.1
Other companies are preparing for specific debt events. NFI intends to redraw its senior credit facility in January 2027 to repay its existing convertible debentures.4 Convertible debentures are debt that can be exchanged for shares.
The same playbook elsewhere
Rio Tinto reports $870 million of productivity benefits banked by the end of June and a $1.8 billion target by year-end.5 Peter Cunningham said the productivity gains include about $530 million in cost savings, with the rest from volume improvements.6 That distinction matters because volume gains depend on demand, while cost savings do not.
In consumer credit, TransUnion's Todd Cello said mortgage guidance stays at 28% growth, or 6% excluding FICO mortgage royalties. He said the first-half outperformance came from lower mortgage rates early in the year, and that the guidance assumes conservative volume declines because rates are now higher.7 At Mexican lender Regional, a speaker said that growth in the financial sector came from existing customers' demand and that it affected net interest margin, the gap between what a bank earns on loans and pays for funding.8
Early signs of an AI productivity lever
A longer-term lever is automation. SAP's CEO, Christian Klein, said at SAP Connect on October 6: "The Autonomous Enterprise has arrived."9 That is a vendor describing its own product, and the dossier contains no measured savings from it. The case that AI will cut CFO cost lines is, for now, a claim rather than a result.
Dates to watch
Several checkable events are coming. The FDA's target decision date for Summit Therapeutics' ivonescimab application is November 14, 2026.10 NFI's credit-facility redraw is planned for January 2027.4 The Durbin Amendment, which caps debit-card fees at banks above $10 billion in assets, will cost Origin Bancorp an estimated $4 million to $4.5 million from mid-2027, after it crossed that threshold.11 Union Pacific expects its Norfolk Southern merger to close in the second half of 2027.1 Our narrative summary also notes CFO turnover at Rivian and Union Pacific, which could affect how closely each company's plans are followed through.12
How much to trust the sources
The Dow and Union Pacific earnings summaries come from a source where 60% of 1,084 checked claims held up. The other earnings-call summaries come from sources where 52% of 6,050 checked claims held up.1,2,5,7,8 Management statements here are reported as stated, not independently confirmed. The Dow financial history comes from SEC filings and is verified. Whether Dow's cost cuts can offset energy costs will only be clear when it reports Q4 and the 2027 benefits start to show.
