UPS raises 2026 outlook as third-quarter revenue rises 6.7% to $22.9 billion

United Parcel Service Inc. (UPS) said Tuesday that third-quarter 2026 revenue rose 6.7% to $22.9 billion. The company also raised its fourth-quarter and full-year 2026 guidance.

The results were published in a press release attached to a regulatory filing dated Oct. 27, 2026. Consolidated operating profit was $1.7 billion, and non-GAAP adjusted operating profit was $2.1 billion. Non-GAAP adjusted figures strip out items the company does not view as part of underlying business performance.

Here’s how the company did:

• Revenue: $22.9 billion, up 6.7% from a year earlier
• Diluted earnings per share: $1.37 vs. $1.55 a year earlier
• Non-GAAP adjusted diluted earnings per share: $1.69 vs. $1.74 a year earlier
• Operating profit: $1,744 million vs. $1,804 million a year earlier
• Non-GAAP adjusted operating profit: $2,054 million vs. $2,132 million a year earlier
• Net income: $1,163 million vs. $1,311 million a year earlier

GAAP results included a net charge of $279 million, or 32 cents per diluted share. The charge comprised $130 million of after-tax transformation strategy costs and a $182 million goodwill impairment in Supply Chain Solutions. A $33 million gain on the sale of MD-11 assets partly offset those charges.

The company’s transformation strategy initiatives are designed to change its spans and layers of management, its processes, technologies and its business portfolio.

Here’s how the company’s segments did during the quarter:

• U.S. Domestic: revenue up 4.5%, driven by a 6.1% increase in revenue per piece. Operating margin was 6.1%, or 7.0% non-GAAP adjusted.
• International: revenue up 7.1%, driven by a 15.0% increase in revenue per piece. Operating margin was 14.9% on both GAAP and non-GAAP adjusted bases.
• Supply Chain Solutions: revenue up 18.2%, primarily due to growth in forwarding and logistics, including healthcare. Operating margin was 3.1%, or 9.2% non-GAAP adjusted.

Supply Chain Solutions consists of operating segments that do not meet the criteria of a reportable segment. In U.S. Domestic, average daily package volume was 15,621 thousand pieces across 65 operating days, compared with 16,150 thousand across 64 operating days a year earlier. U.S. Domestic cost per piece was $13.45, up 4.1%, or $13.32 on a non-GAAP adjusted basis, up 5.5%.

“Our third-quarter results demonstrate the continued strengthening of our business fundamentals, driven by premium growth and greater network efficiency,” UPS chief executive officer Carol Tomé said. “As momentum builds, we are entering the holiday shipping season from a position of strength, with the most automated and efficient network in our history.”

UPS is raising its fourth-quarter and full-year 2026 guidance. For the fourth quarter, it expects consolidated revenue of approximately $25.7 billion and non-GAAP adjusted operating profit of approximately $3.3 billion.

For the full year, the company expects consolidated revenue of approximately $92.6 billion, non-GAAP adjusted operating profit of approximately $8.75 billion, non-GAAP adjusted diluted EPS of approximately $7.28, and non-GAAP adjusted free cash flow of approximately $6.1 billion. That free cash flow measure is cash from operations less capital expenditures, adjusted for property sale proceeds and other investing items.

The company also confirmed for full-year 2026 capital expenditures of approximately $3.0 billion, dividend payments of around $5.4 billion, subject to board approval, an effective tax rate of approximately 23% and $1.3 billion in pension contributions.

Transformation strategy costs totaled $1.4 billion in the first nine months of 2026, against $460 million a year earlier. Through these initiatives, the company said it reduced its operational workforce, closed certain daily operations at leased and owned buildings, and achieved approximately $1.8 billion of program benefits. It expects nearly $3 billion of benefits in full-year 2026.

For full-year 2026, the company expects to exclude between $1.4 billion and $1.6 billion in costs, primarily employee separation costs and third-party consulting fees. Of that amount, $1.2 billion relates to the Driver Choice Program. As of Sept. 30, it had incurred $1.4 billion of costs in 2026 and $1.9 billion in total costs under the initiatives.

The planned volume reductions from its largest customer were completed in the second quarter of 2026, the company said. Its Efficiency Reimagined initiative is not expected to conclude until the fourth quarter of 2027.

For the first nine months, operating profit was $3,941 million, against $5,292 million a year earlier. Free cash flow, a non-GAAP measure, was $4,220 million, compared with $2,744 million.

The year-earlier quarter included a $330 million pre-tax gain within Supply Chain Solutions, or 30 cents of EPS, from a sale-leaseback transaction.

The 8-K was signed by Executive Vice President and Chief Financial Officer Brian Dykes.