United Parcel Service, Inc.
UPS · NYSE
Next quarter
Expected to report Jan 26, 2027 — estimated from last year’s reporting date.
Consensus is $2.76 EPS for Dec 2026 across 10 estimates, ranging $2.74 to $2.80.
UPS Sep 2026
- 3.68%
- $1.63
- $1.69
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Highlights
- Adjusted earnings UPS reported adjusted diluted EPS of $1.69, 3.7% above the $1.63 consensus; GAAP diluted EPS was $1.37 after $0.32 per share of net charges.
- Revenue growth Third-quarter revenue rose 6.7% year over year to $22.9 billion, with growth in all segments, and edged up from $22.83 billion in Q2 FY2026.
- Margins and operating profit Adjusted operating profit was $2.054 billion, down 3.7% year over year, while adjusted operating margin fell to 9.0% from 10.0%; GAAP operating profit was $1.744 billion versus $1.804 billion.
- Domestic package Revenue increased 4.5% to $14.865 billion as revenue per piece rose 6.1%; adjusted operating profit grew 14.3% to $1.034 billion despite average daily volume declining 3.3%.
- International package Revenue climbed 7.1% to $5.007 billion, supported by 15.0% higher revenue per piece; adjusted operating profit increased 8.0% to $746 million.
- Supply Chain Solutions Revenue rose 18.2% to $2.981 billion, but adjusted operating profit fell 48.9% to $274 million. GAAP results included a $182 million goodwill impairment.
- Raised outlook UPS now expects 2026 revenue of about $92.6 billion, adjusted operating profit of $8.75 billion, adjusted EPS of $7.28 and adjusted free cash flow of $6.1 billion; Q4 revenue guidance is about $25.7 billion.
- Cash and transformation Nine-month free cash flow was $4.22 billion versus $2.744 billion a year ago. UPS recorded $1.4 billion of transformation costs year to date and cited about $1.8 billion of program benefits.
Analysis
UPS’s third quarter combined solid top-line growth and an adjusted EPS beat with lower year-over-year adjusted profit and margin. Revenue of $22.9 billion grew 6.7% from a year ago and was slightly above Q2 FY2026’s $22.83 billion. Adjusted diluted EPS of $1.69 topped the $1.63 consensus by 3.7%, although it was down from $1.74 a year earlier. Adjusted operating profit declined 3.7% to $2.054 billion and margin narrowed to 9.0% from 10.0%. GAAP EPS was $1.37, including net charges of $279 million, or $0.32 per share. Against the supplied Q2 FY2026 figures, GAAP operating profit rose from $930 million and EPS from $0.71.
The segment picture was uneven: Domestic and International both grew revenue per piece and adjusted operating profit, while Supply Chain Solutions’ adjusted profit nearly halved despite strong revenue growth. Domestic average daily volume remained lower year over year, underscoring the role of pricing and efficiency in its gains. UPS raised its full-year outlook, including adjusted EPS to about $7.28 and free cash flow to about $6.1 billion, and expects a stronger seasonal fourth quarter. The company also pointed to network efficiency initiatives, which generated about $1.8 billion of benefits through nine months, alongside substantial restructuring costs.
Earnings and margins
Revenue increased 6.7% year over year to $22.9 billion. Adjusted operating profit declined to $2.054 billion from $2.132 billion, and adjusted operating margin contracted by 1.0 percentage point to 9.0%. GAAP operating profit was $1.744 billion, down from $1.804 billion, while GAAP net income fell to $1.163 billion from $1.311 billion and diluted EPS to $1.37 from $1.55. The year-ago quarter included a $330 million pre-tax Supply Chain Solutions sale-leaseback gain, according to the release. The current quarter’s $279 million net charge included $130 million after tax for transformation costs, a $182 million goodwill impairment and a $33 million gain on MD-11 assets. Adjusted EPS of $1.69 exceeded the $1.63 consensus; adjusted EPS a year ago was $1.74.
U.S. Domestic package
- Revenue and pricing Revenue rose 4.5% to $14.865 billion, driven by a 6.1% increase in revenue per piece.
- Volume and costs Average daily package volume was 15.621 million, down from 16.150 million, or about 3.3%. Adjusted cost per piece increased 5.5% to $13.32.
- Profitability Adjusted operating profit grew 14.3% to $1.034 billion and adjusted margin improved to 7.0% from 6.4%. GAAP operating profit was $906 million, versus $603 million a year earlier.
International package
- Revenue and yield Revenue increased 7.1% to $5.007 billion; revenue per piece rose 15.0%.
- Operating results Adjusted operating profit increased 8.0% to $746 million, with adjusted margin of 14.9% versus 14.8%. GAAP operating profit was $746 million, up from $676 million.
Supply Chain Solutions
Revenue rose 18.2% to $2.981 billion, primarily on growth in forwarding and logistics, including healthcare. The segment’s adjusted operating profit fell 48.9% to $274 million from $536 million, and adjusted margin dropped to 9.2% from 21.3%. GAAP operating profit was $92 million, including a $182 million goodwill impairment for a reporting unit; without that charge, the reported result would have been materially higher. The revenue increase therefore did not translate into comparable profit growth.
Raised 2026 outlook
- Full year UPS raised its outlook to approximately $92.6 billion of consolidated revenue, $8.75 billion of adjusted operating profit, $7.28 of adjusted diluted EPS and $6.1 billion of adjusted free cash flow.
- Fourth quarter The company expects revenue of about $25.7 billion and adjusted operating profit of about $3.3 billion.
- Capital and other plans Full-year capital expenditures remain about $3.0 billion; dividend payments are expected to be around $5.4 billion, subject to board approval. The company also confirmed a roughly 23% effective tax rate and $1.3 billion of pension contributions.
Efficiency and cash flow
UPS attributed improving fundamentals to premium growth and a more efficient network, which it said is entering the holiday season in its most automated and efficient state. Through the first nine months, transformation initiatives produced approximately $1.8 billion of benefits; the company expects nearly $3 billion for the full year. It incurred $1.4 billion of initiative costs in 2026 through September, including costs tied to network reconfiguration and Efficiency Reimagined, which is expected to continue through Q4 2027. Nine-month free cash flow improved to $4.220 billion from $2.744 billion a year earlier, alongside lower capital expenditure outlays of $2.221 billion versus $2.969 billion.
