10-Q · May 6, 2026
UPS's Q1 2026 results showed declining revenue and earnings compared to Q1 2025, with consolidated revenue decreasing by 1.6% to $21.2B. Operating profit fell 23.9%, driven by lower package volumes and increased…
Earnings analysis · 10-Q
UPS earnings analysis
Filed November 4, 2026 · Our reading of the company's report
The latest report
UPS delivered strong third-quarter revenue growth of 6.7% to $22.853 billion, driven by pricing, fuel surcharges, favorable mix and AHG-related healthcare growth despite a 4.2% volume decline. However, GAAP diluted EPS…
Read full summary
UPS delivered strong third-quarter revenue growth of 6.7% to $22.853 billion, driven by pricing, fuel surcharges, favorable mix and AHG-related healthcare growth despite a 4.2% volume decline. However, GAAP diluted EPS fell 11.6% to $1.37 and operating margin contracted to 7.6%, with a severe 82.5% decline in SCS operating profit and a $182 million goodwill impairment charge. Cash flow and liquidity improved, but elevated transformation costs, higher debt, persistent volume pressure and extended restructuring execution keep the overall filing bearish.
Gross and operating margin
How much of each revenue dollar the business keeps.
One point per quarterly or annual filing. Both margins are shares of that report's revenue.
Where revenue came from
The business segments reported by the company.
Shares of the segments disclosed in this filing, largest first.
How we read each report
Our analysis across the last few reports.
Our model's reading of each filing, not the share price or the market's reaction. Annual and quarterly reports each occupy one position.
Reported figures
- Earnings per share
- $1.37
- Operating margin
- 7.6%
What stood out
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Revenue growth despite lower volume
Third-quarter revenue increased 6.7% year over year to $22.853 billion, while average revenue per piece rose 7.7% to $15.96, more than offsetting a 4.2% decline in average daily package volume.
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Domestic profitability improved
U.S. Domestic Package revenue rose 4.5% to $14.865 billion and operating profit increased 50.2% to $906 million; operating margin expanded to 6.1% from 4.2%.
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International margin resilience
International Package revenue grew 7.1% to $5.007 billion and operating profit increased 10.4% to $746 million, supported by a 15.0% increase in revenue per piece.
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Cash generation improved
Operating cash flow for the first nine months was $5.986 billion, up from $5.148 billion in the prior-year period, while capital expenditures declined to $2.221 billion from $2.969 billion.
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Transformation benefits progressing
Management reported approximately $1.8 billion of program benefits in the first nine months and expects nearly $3.0 billion of full-year 2026 benefits from Network Reconfiguration and Efficiency Reimagined.
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Strong liquidity position
Liquidity remained substantial at $6.8 billion of cash and cash equivalents as of September 30, 2026, and the company had no outstanding balances under its U.S. or European commercial paper programs.
What to watch
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Profitability lagging revenue growth
Consolidated operating profit fell 3.3% to $1.744 billion and operating margin declined 80 basis points to 7.6% despite 6.7% revenue growth. Year-to-date operating profit was down 25.5% to $3.941 billion.
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Supply Chain Solutions deterioration
SCS operating profit plunged 82.5% to $92 million, with operating margin dropping to 3.1% from 20.8%. The quarter included a $182 million goodwill impairment charge in the Healthcare Logistics and Distribution reporting unit.
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Extended restructuring burden
Transformation execution remains costly: UPS incurred $1.4 billion of Network Reconfiguration and Efficiency Reimagined costs in 2026 through September 30, including approximately $1.2 billion related to the Driver Choice Program, while the Efficiency Reimagined initiative is not expected to conclude until the fourth quarter of 2027.
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Persistent volume pressure
Global small-package volume declined 4.2% in the quarter, including declines of 3.3% in U.S. Domestic Package and 8.7% in International Package. Management cited planned largest-customer volume reductions, revenue-quality actions, trade-policy changes and Middle East geopolitical tensions.
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Transportation and fuel inflation
Operating expenses increased 7.6% to $21.109 billion, including a 33.0% increase in purchased transportation to $3.275 billion and a 44.2% increase in fuel expense to $1.544 billion.
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Higher leverage and refinancing needs
Debt outstanding increased to $26.078 billion from $24.782 billion at the prior-year period end, while interest expense rose 10.1% year to date to $827 million; $500 million of fixed-rate senior notes mature in 2026.
Management's outlook
The 10-Q does not provide explicit consolidated revenue or EPS guidance, and does not state a change versus the prior company outlook. Management expects 2026 capital expenditures of approximately $3.0 billion, with approximately 80% allocated to network enhancement and technology initiatives; it also expects nearly $3.0 billion of full-year 2026 benefits from Network Reconfiguration and Efficiency Reimagined and $1.4-$1.6 billion of related adjusted operating expense exclusions.
Earlier filings 4
10-K · February 17, 2026
UPS reported total revenue of $88.7 billion in 2025 while executing a Customer First, People Led, Innovation Driven strategy that emphasizes higher‑yield customers, healthcare, SMBs and international expansion.…
10-Q · August 6, 2025
UPS reported consolidated revenue of $21,221 million for the quarter ended June 30, 2025, modestly below prior-year quarter revenue of $21,818 million. Operating profit declined to $1,822 million and diluted EPS fell to…
10-K · February 18, 2025
UPS reports scale and network strength — 5.7 billion packages delivered in 2024 and total revenue of $91.1 billion — while executing network and workforce restructurings (reduced ~14,000 positions under 'Fit to Serve')…
This is our reading of a public filing, not the filing itself. Analysis can contain errors; check the source document for full context.