UPS 1Q26 Earnings Beat Estimates

UPS reported first-quarter 2026 earnings on April 28, posting adjusted earnings per share that exceeded estimates despite year-over-year declines in consolidated revenue and GAAP profit. The company reaffirmed its full-year 2026 revenue and adjusted operating margin guidance, citing cost savings from its network efficiency program.

Quarter Results and Margins

Consolidated revenue reached $21.2 billion, surpassing the roughly $20.97 billion estimate but falling 1.6% from the prior year. GAAP consolidated operating profit was $1.27 billion, representing a 6.0% margin, while non-GAAP adjusted operating profit was $1.32 billion, or 6.2%. Both figures declined from the previous year’s $1.67 billion and $1.76 billion, respectively. GAAP diluted earnings per share were $1.02, and adjusted EPS was $1.07, beating consensus estimates. GAAP net income dropped 27% to $864 million. Results included after-tax transformation charges of $42 million, or $0.05 per diluted share.

Segments and Cost Savings

The U.S. Domestic segment generated $14.125 billion in revenue, down 2.3% from a year earlier. Operating profit was $515 million on a GAAP basis and $565 million adjusted, with margins of about 3.6% and 4.0%. Average daily volume declined 8.0% to roughly 16.04 million pieces, while revenue per piece rose 6.5%.

International operations showed growth, with revenue increasing 3.8% to $4.54 billion. GAAP operating profit was $547 million, and adjusted profit was $551 million, both near 12.0% margins. Revenue per piece rose 10.7%.

Supply Chain Solutions revenue fell 6.5% to $2.537 billion, largely due to lower Mail Innovations volume. Operating profit was $205 million GAAP and $206 million adjusted, lifting the margin to 8.1% from 1.7% a year earlier.

UPS’s network efficiency program delivered about $600 million in cost savings during the quarter. The company reaffirmed its full-year 2026 guidance for consolidated revenue near $89.7 billion and an adjusted operating margin target around 9.6%, supported by a $3.0 billion cost-savings goal. The outlook was presented on a non-GAAP basis due to the unpredictability of certain GAAP items.

The results reflect weaker U.S. volumes and softer top-line performance but show progress in cost reduction and margin recovery, especially in supply-chain solutions and international operations. Management identified the network efficiency program as the key driver behind the reaffirmed guidance despite lower GAAP profit and net income compared with the prior year.