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

United Parcel Service (NYSE: UPS) said third-quarter 2026 consolidated revenue rose 6.7% to $22.9 billion, with growth in all segments, and raised its full-year outlook, according to its earnings release dated October 27.

What happened

UPS said consolidated operating profit was $1.7 billion and non-GAAP adjusted operating profit was $2.1 billion. Diluted earnings per share were $1.37, and non-GAAP adjusted diluted earnings per share were $1.69. The operating margin was 7.6% on a GAAP basis and 9.0% on the non-GAAP adjusted basis.

GAAP results include a net charge of $279 million, or $0.32 per diluted share. It consists of after-tax transformation strategy costs of $130 million and a $182 million goodwill impairment charge in Supply Chain Solutions, partly offset by a $33 million gain on the sale of MD-11 aircraft assets, UPS said.

By segment, U.S. Domestic revenue rose 4.5% to $14,865 million from $14,220 million a year earlier, driven by a 6.1% increase in revenue per piece. Its non-GAAP adjusted operating profit was $1,034 million, up 14.3% (computed) from $905 million.

International revenue rose 7.1% to $5,007 million from $4,673 million, driven by a 15.0% increase in revenue per piece. Its operating margin was 14.9% on both a GAAP and a non-GAAP adjusted basis.

Supply Chain Solutions revenue rose 18.2% to $2,981 million from $2,522 million, which UPS attributed primarily to growth in forwarding and logistics, including healthcare. Operating profit was $92 million, against $525 million a year earlier. Adjusted operating profit was $274 million, down 48.9% (computed) from $536 million. UPS said the third quarter of 2025 included a $330 million pre-tax gain in Supply Chain Solutions from a sale-leaseback transaction.

"Our third-quarter results demonstrate the continued strengthening of our business fundamentals, driven by premium growth and greater network efficiency," said Carol Tomé, UPS chief executive officer.

Why it matters

The quarter follows a multi-year reshaping of the U.S. network. UPS said that in connection with planned volume declines from its largest customer it began a Network Reconfiguration initiative in the fourth quarter of 2024, and that the planned volume reductions from that customer were completed in the second quarter of 2026. The company did not name the customer in the release.

UPS said it had incurred $1.4 billion in costs during 2026 and $1.9 billion in total costs through September 30, 2026 under these initiatives. It said its Efficiency Reimagined initiative is not expected to conclude until the fourth quarter of 2027.

Guidance

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

For the full year, the company now 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. UPS confirmed 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.

What to watch

Tomé and Chief Financial Officer Brian Dykes discussed the results on a conference call at 8:30 a.m. ET on October 27, according to the release. The company's guidance puts fourth-quarter revenue at approximately $25.7 billion; UPS's fourth-quarter report will show how results compare with that figure.